Indian equities experience an upward surge following Reserve Bank of India's policy: Nifty Bank climbs approximately 800 points, and the real estate sector witnesses a significant rise.
Stock markets in India, specifically the Sensex and Nifty 50, had an impressive surge on June 6th, 2025, following the Reserve Bank of India (RBI) announcing a larger-than-expected policy rate cut. Acting aggressively, the RBI slice the repo rate by a whopping 50 basis points to 5.5%, sending ripples throughout the financial landscape.
Investors welcomed this move with open arms, as it signaled the central bank's renewed commitment to fuel economic growth and investor confidence. The Sensex gained 746.95 points, while the Nifty 50 climbed by 252.15 points.
The banking and finance sectors are among the primary beneficiaries of this policy change. Corporate bank stocks may experience turbulence in the short term due to squeezed margins, but the anticipated credit growth will help alleviate this hurdle eventually. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, believes this rate cut could put banking stocks under pressure initially but hopes that the stimulated credit growth will counterbalance the dip in margins.
The real estate sector is also expected to reap the benefits of this rate cut, as reduced borrowing costs will make housing more affordable and buoy homebuyer sentiments. Mayank Jain, CEO of KREEVA, a renowned real estate developer, stated that a cheaper borrowing environment would enhance homebuyer sentiment and expedite the flow of liquidity within the market.
Although the media sector experienced a minor dip of 1%, other sectoral indices finished the day in the green, with metal, auto, and consumer durables witnessing gains of over 1% each. All in all, RBI's bold, surprising, and action-packed monetary policy communication has the potential to drive positive effects across various segments of the economy.
Fun Fact: Did you know that the Sensex has been India's leading stock market index since it was introduced in 1986? Its current high reflects the nation's economic progress and the resilience of its financial markets.
The Sensex and Nifty 50, fueled by the RBI's policy rate cut, recorded impressive surges, indicating a renewed central bank commitment to economic growth and investor confidence. This rate cut is anticipated to have a positive impact on the real estate sector, as reduced borrowing costs will make housing more affordable and boost homebuyer sentiments. Meanwhile, VK Vijayakumar, a chief investment strategist, believes banking stocks may initially face pressure due to squeezed margins but expects the stimulated credit growth to counterbalance this dip. Other sectoral indices, like metal, auto, and consumer durables, also experienced gains, suggesting a broad-based economic recovery.
