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Informist, Friday, Jun. 6, 2025

 

By Akash Mandal

 

MUMBAI – Benchmark indices ended higher as the market cheered the higher-than-expected repo rate cut and the surprise cut in cash reserve ratio by the Reserve Bank of India. Indices that were slightly lower in early trade rose over 1?ter the central bank cut the policy repo rate by 50 basis points instead of the 25 basis points the market had expected. The Nifty 50 finally closed above the psychologically important 25000 level after eight sessions, with 45 stocks in the index ending higher.

 

Most stocks in rate-sensitive sectors such as banking, real estate, financial services, automobiles, consumer durables, and infrastructure were among the top performers. Non-banking finance stocks such as Shriram Finance, Bajaj Finance, and Bajaj Finserv ended 2-6% higher as analysts expect the net-interest margins will rise in the near term. The Nifty Financial Services ended 1.8% higher at 26848.90 after touching an all-time high of 26922.20 during the session. Unlike banks that rely on deposits for lending, which adjust with a lag to changing rates, NBFCs borrow from the market to meet their funding requirements.

 

While the rise was not as sharp, bank stocks also saw a significant rally. The Nifty Bank ended 1.5% higher at 56578.40 points after touching an all-time high of 56695 points after the RBI's surprise 50 basis point rate cut, which is expected to spur credit growth. The industry will now push for a 12-13% credit growth in 2025-26 (Apr-Mar) compared to the 7-8% growth expected earlier, State Bank of India Chairman C.S. Setty said in an interview with CNBC-TV18. 

 

Gold loan companies also ended higher with Muthoot Finance surging 8% to an all-time high of INR 2470 after RBI Governor Sanjay Malhotra announced key changes to the proposed gold loan regulations, such as revising the loan-to-value ratio for gold loans below INR 250,000 to 85% from 75%. The stock ended 7% higher.

 

IDFC First Bank, AU Small Finance Bank, and Axis Bank ended 3-7% higher each. "A 'jumbo' rate cut and surprise 100 bps cut in CRR is a great relief to the markets... this would infuse roughly Rs 2.5 L Cr (INR 2.5 trillion) liquidity in the system by November which should directly support bank margins during 2HFY26 (Oct-Mar)," Devarsh Vakil, head of prime research at HDFC Securities, said in a note.

 

Boosted by broad-based buying following the monetary policy outcome, the Nifty 50 ended at 25003.05 points, up 252.15 points or 1%. Banking and financial services stocks such as HDFC Bank, Bajaj Finance, Shriram Finance, and Axis Bank were the top contributors to the rise in the index. The BSE Sensex closed at 82188.99 points, up 746.95 points or 0.9%. Broader market indices also ended 1-2% higher. Sentiment was likely further boosted as the India VIX, the market's volatility indicator, ended 3% lower. The index has ended down in seven of the last eight sessions, falling 21%. Analysts had earlier attributed high volatility and increased uncertainty as reasons for the gains in the market to be capped.

 

Real estate stocks were among the best performers following the rate cut. The Nifty Realty rose nearly 5% to close at a five-month high. With discretionary spending expected to go up due to lower interest rates, analysts expect real estate sales to shoot up, especially in the affordable housing segment. Godrej Properties, DLF, Oberoi Realty, and Prestige Estates Projects all ended 5-7% higher.

 

Automobile stocks also gained with Ashok Leyland, Maruti Suzuki India, and Mahindra & Mahindra ending 2-4% higher. With the automobile industry facing a slowdown for quite some time now, analysts were hopeful that the higher-than-expected repo rate cut and the cut in the cash reserve ratio, coupled with earlier steps such as income tax rebates, would finally be able to revive demand and consumption. 

 

On the other hand, the Nifty Defence was the worst-hit among sectoral indices and ended nearly 2% lower. The index had risen 13% in the past 12 sessions amid subdued performance by other sectors. Zen Technologies, Garden Reach Shipbuilders & Engineers, and Data Patterns (India) ended 3-5% lower.

 

Among specific stocks, IndusInd Bank ended over 2% higher after Governor Malhotra said the resignation of Sumanth Kathpalia as managing director and chief executive officer of the private bank "should be good enough" in the wake of the recent accounting discrepancies, indicating no further regulatory action against the bank. Some analysts had expected more resignations from the bank's senior management after the discrepancies had come to light on Mar. 10. ZF Commercial Vehicle Control Systems India ended 4% higher despite nearly 600,000 shares being sold at a discount in a large deal on the NSE.

 

Bharti Hexacom ended over 3% lower after Motilal Oswal Financial Services downgraded the company's shares to 'neutral' due to high valuations.

 

* Of the Nifty 50 stocks, 45 rose and 5 fell 

* Of the Sensex stocks, 28 rose and 2 fell

* On the NSE, 1,673 stocks rose, 1,229 fell, and 91 were unchanged

* On the BSE, 2,278 stocks rose, 1,744 fell, and 134 were unchanged

* Nifty Realty: up 4.7%; Nifty Metal: up 1.9%; Nifty India Defence: down 1.7%

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BSE                                               NSE

Sensex: 82188.99, up 746,95 points or 0.9%        Nifty 50: 25003.05, up 252.15 points or 1%

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S&P BSE Sensitive Index	Nifty 50
Lifetime High: 85978.25 (Sept. 27, 2024)	: Lifetime High: 26277.35 (Sept. 27, 2024)
Record Close High: 85836.12 (Sept. 26, 2024)	: Record Close High: 26216.05 (Sept. 26, 2024)
2025 1st day close: 78507.41 (Jan. 1)	: 2025 1st day close: 23742.90 (Jan. 1)
2025 Closing High: 82530.74 (May 15)	: 2025 Closing High: 25062.10 (May 15)
2025 Closing Low: 72989.93 (Mar. 4)	: 2025 Closing Low: 22082.65 (Mar. 4)
2025 High (intraday): 82718.14 (May 15)	: 2025 High (intraday): 25116.25 (May 15)
2025 Low (intraday): 71425.01 (Apr. 7)	: 2025 Low (intraday): 21743.65 (Apr. 7)
2024 1st day close: 72271.94 (Jan. 1)	: 2024 1st day close: 21741.90 (Jan. 1)
2024 Closing High: 85836.12 (Sept. 26)	: 2024 Closing High: 26216.05 (Sept. 26)
2024 Closing Low: 70370.55 (Jan. 23)	: 2024 Closing Low: 21238.80 (Jan. 23)
2024 High (intraday): 85978.25 (Sep. 27)	: 2024 High (intraday): 26277.35 (Sept. 27)
2024 Low (intraday): 70001.60 (Jan. 24)	: 2024 Low (intraday): 21137.20 (Jan. 24)
2023 1st day close: 61167.79 (Jan. 2)	: 2023 1st day close: 18197.45 (Jan. 2)
2023 Closing High: 72410.38 (Dec. 28)	: 2023 Closing High: 21778.70 (Dec. 28)
2023 Closing Low: 59288.35 (Feb. 27)	: 2023 Closing Low: 17311.80 (Oct. 17)
2023 High (intraday): 72484.34 (Dec. 28)	: 2023 High (intraday): 21801.45 (Dec. 28)
2023 Low (intraday): 58699.20 (Jan. 30)	: 2023 Low (intraday): 17098.55 (Jan. 17)
2022 1st day close: 59183.22 (Jan. 3)	: 2022 1st day close: 17625.70 (Jan. 3)
2022 Closing High: 63284.19 (Dec. 1)	: 2022 Closing High: 18812.50 (Dec. 1)
2022 Closing Low: 51360.42 (Jun. 17)	: 2022 Closing Low: 15293.50 (Jun. 17)
2022 High (intraday): 63583.07 (Dec. 1)	: 2022 High (intraday): 18887.60 (Dec. 1)
2022 Low (intraday): 50921.22 (Jun. 17)	: 2022 Low (intraday): 15183.40 (Jun. 17)
2021 Closing High: 61305.95 (Oct. 14)	: 2021 Closing High: 18338.55 (Oct. 14)
2021 Closing Low: 46285.77 (Jan. 29)	: 2021 Closing Low: 13634.60 (Jan. 29)
2021 High (intraday): 61353.25 (Oct. 14)	: 2021 High (intraday): 18350.75 (Oct. 14)
2021 Low (intraday): 46160.46 (Jan. 29)	: 2021 Low (intraday): 13596.75 (Jan. 29)
2020 Closing High: 47751.33 (Dec. 31)	: 2020 Closing High: 13981.95 (Dec. 30)
2020 Closing Low: 25981.24 (Mar. 23)	: 2020 Closing Low: 7610.25 (Mar. 23)
2020 High (intraday): 47896.97 (Dec. 31)	: 2020 High (intraday): 14024.85 (Dec. 31)
2020 Low (intraday): 25638.90 (Mar. 24)	: 2020 Low (intraday): 7511.10 (Mar. 24)
2019 High (intraday): 41809.96 (Dec. 20)	: 2019 High (intraday): 12293.90 (Dec. 20)
2019 Low (intraday): 35287.16 (Feb. 19)	: 2019 Low (intraday): 10583.65 (Jan. 29)
2018 High (intraday): 38938.91(Aug. 28))	: 2018 High(intraday): 11760.20 (Aug. 28)
2018 Low (intraday): 32483.8 (Mar. 23)	: 2018 Low (intraday): 9951.9 (Mar. 23)
2017 High (intraday): 34005.37 (Dec. 26)	: 2017 High(intraday): 10515.10 (Dec. 26)

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End

 

Edited by Saji George Titus

 

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