Barometers trade with strong gains; European mrkt decline

The domestic equity indices continued to trade with significant gains in afternoon trade after the RBI cut the repo rate by 50 bps to 5.50%, amid a favorable domestic environment. Looking ahead, the MPC will closely monitor evolving domestic and global conditions to guide future policy moves. Market participants are also closely tracking bond markets and global trade dynamics. The Nifty hovered above the 24,950 mark.

Realty, banking and metal shares advanced while media and FMCG stocks declined.

At 13:30 IST, the barometer index, the S&P BSE Sensex, surged 645.54 points or 0.79% to 82,087.58. The Nifty 50 index jumped 221.95 points or 0.89% to 24,973.15.

In the broader market, the S&P BSE Mid-Cap index rose 0.75% and the S&P BSE Small-Cap index added 0.50%.

The market breadth was positive. On the BSE, 2,249 shares rose and 1,670 shares fell. A total of 158 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, shed 2.63% to 14.69.

RBI Monetary Policy Outcome:

The Reserve Bank of India (RBI) cut the policy repo rate by 50 basis points to 5.50%, signaling a shift in its monetary policy stance from accommodative to neutral.

The decision, announced at the conclusion of the Monetary Policy Committee's (MPC) 55th meeting held from June 4 to 6, 2025, was driven by easing inflation and a stable growth outlook.

With the rate cut coming into effect immediately, the standing deposit facility (SDF) rate now stands at 5.25%, while the marginal standing facility (MSF) rate and the bank rate are adjusted to 5.75%.

This decision is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The RBI maintained its real GDP growth projection for FY26 at 6.5%, with quarterly growth seen at 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4.

On the inflation front, the RBI revised its forecast downward to 3.7% for FY26 from the earlier estimate of 4%. Quarterly projections suggest CPI inflation at 2.9% in Q1, 3.4% in Q2, 3.9% in Q3, and 4.4% in Q4.

The RBI cited broad-based moderation in inflation over the past six months, with headline CPI now well below target. It noted that both food and core inflation are expected to remain soft, helped by easing global commodity prices amid a global growth slowdown.

Looking ahead, the MPC emphasized a data-dependent approach, stating it will closely monitor evolving domestic and global conditions to guide future policy moves.

The minutes of the MPC meeting will be released on June 20, and the next policy meeting is scheduled from August 4 to 6, 2025.

Gainers & Losers:

Shriram Finance (up 5.54%), Bajaj Finance (up 5.29%), IndusInd Bank (up 4.79%), JSW Steel (up 3.60%) and Axis Bank (up 3.10%) were the major Nifty gainers.

HDFC Life Insurance Company (down 1.17%), Bharat Electronics (BEL) (down 0.97%), SBI Life Insurance Company (down 0.45%), Sun Pharmaceuticals Industries (down 0.24%) and Bharti Airtel (down 0.14%) were the major Nifty losers.

Stocks in Spotlight:

Banking stocks edged higher after the Reserve Bank of India (RBI) cut the policy repo rate by 50 basis points to 5.50%, signaling a shift in its monetary policy stance from accommodative to neutral.

IDFC First Bank (up 7.44%), IndusInd Bank (up 4.79%), AU Small Finance Bank (up 4.61%), Axis Bank (up 3.10%), Kotak Mahindra Bank (up 1.48%), HDFC Bank (up 1.33%), Punjab National Bank (up 0.93%), State Bank of India (up 0.81%) and Federal Bank (up 0.77%) surged.

Max Estates rose 0.84%. The company's board approved a material related party transaction between Max Estates Gurgaon Two (Developer), a wholly-owned subsidiary, and Antara Senior Living (ASLL), a wholly-owned subsidiary of Max India.

Hawkins Cookers rose 0.07%. The company said that it has commenced commercial operations at its fourth factory in India at A-3, Sathariya Industrial Development Area, Jaunpur District, Uttar Pradesh.

Praj Industries added 2.95% after the company secured an international assignment from Enersur SA, one of Paraguay's leading renewable energy firms, to develop a fully integrated biorefinery project in the South American nation.

Brigade Enterprises gained 2.59% after the company's wholly owned subsidiary, Brigade Tetrarch announced the incorporation of a Limited Liability Partnership (LLP) named Auraterra Developers LLP.

Indian Renewable Energy Development Agency fell 0.99%. The company informed that its board has approved the opening of the issue of qualified institutional placement (QIP) of equity shares with the floor price of Rs 173.83 per equity share.

Life Insurance Corporation of India (LIC) shed 0.07%. The company announced that its current executive director, Ramakrishnan Chander, has assumed charge as the company's new chief investment officer (CIO), effective immediately.

Global Markets:

US Dow Jones futures were up 181 points, signaling a positive start for Wall Street.

Most European markets declined as investors around the world awaited more key data for clues on the shape of the U.S. economy.

Most Asian stocks advanced after a 90-minute phone call between US President Donald Trump and Chinese President Xi Jinping sparked hopes of renewed trade talks. The discussion, centered on rare earth exports, ended with both leaders agreeing to resume negotiations. A US delegation including Scott Bessent, Howard Lutnick, and Jamieson Greer will soon head to China to pick up the dialogue.

Trump called the conversation very good, and both sides even exchanged invitations for state visits.

Back on Wall Street, however, the mood was less upbeat. All three major US indices closed lower overnight. The S&P 500 dropped 0.53%, dragged down by a sharp fall in Tesla shares. The Nasdaq slid 0.83%, and the Dow shed 0.25%.

Tesla plunged over 8% after tensions between Trump and Elon Musk took center stage. Trump said he was very disappointed with Musk, following the Tesla CEO's public criticism of Trump's much-touted policy bill. Musk didn't hold back either, snapping back with, Without me, Trump would've lost.

Meanwhile, fresh US labor data showed initial jobless claims climbed to 247,000 last week, up from a revised 239,000. Private sector job growth also slowed, with just 37,000 jobs added in May compared to 60,000 in April.

These figures set the stage for Friday's crucial nonfarm payrolls report, one that could shape the Fed's next move.

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