- RBI’s 50 bps repo rate and 100 bps CRR cut fuelled a market rally.
- Nifty surpassed 25,000; Bank Nifty hit fresh all-time highs.
- Global inflation data and FII flows to steer next week’s direction.
The Indian stock market saw a strong rebound in the first week of June following the RBI’s unexpected and aggressive monetary policy moves. A 50 basis point repo rate cut coupled with a 100 basis point CRR reduction infused optimism, driving Nifty past the crucial 25,000 mark.
Looking ahead, the market’s trajectory will hinge on domestic inflation data, global macroeconomic releases, and FII behavior. While historical June performance favors a bullish bias, caution remains around external risks like trade tensions and the US Core CPI print.
Liquidity Surge, Global Cues, and the Nifty’s Next Move
The RBI‘s aggressive 150 basis point liquidity infusion surprised the markets and triggered a broad-based rally. This move is expected to inject ₹2.5 trillion into the banking system, enhancing credit flow and benefiting sectors aligned with growth and interest-rate sensitivity.
Technical indicators reflect positive sentiment. Nifty’s bullish weekly candle with a long lower shadow suggests accumulation at lower levels, with strong support near 24,700. Momentum indicators like RSI remain healthy, and price action aligns with a potential breakout toward 25,500.
On the global front, investor eyes will be fixed on key economic data from the US, China, and the Eurozone. The US Core CPI will influence global rate expectations, while trade developments, particularly with India and the US, could affect sentiment and sector rotation.
Meanwhile, tech stocks in the US show diverging performance. Nvidia and Microsoft are capitalizing on AI momentum, while Apple lags behind due to limited innovation in the space. This reflects a larger market preference for growth narratives powered by emerging tech, something investors may also consider when evaluating Indian tech exposure.
With liquidity tailwinds and technical momentum in its favor, Nifty remains poised for higher levels, though next week’s macro data could determine the pace and sustainability of the rally.
“Markets are driven by liquidity, sentiment, and surprise — and the RBI just delivered all three in one go.” — Sudeep Shah, SBI Securities
