Sensex welcomes RBI’s rate cut, Banking stocks lead to new highs

The Indian equity benchmark indices Sensex and Nifty closed higher on Friday, rebounding from early declines after the RBI announced a 50 basis point repo rate cut, with the Nifty 50 recording its strongest performance in three weeks.At close, the Sensex was up 746.95 points or 0.92 percent at 82,188.99, and the Nifty was up 252.15 points or 1.02 percent at 25,003.05.
Shriram Finance, Bajaj Finance, JSW Steel, Axis Bank, Maruti Suzuki were the top gainers on the Nifty while losers included HDFC Life, Bharat Electronics, Tata Steel, Bharti Airtel, Sun Pharma.
On the sectoral front, the Nifty Bank index surged to fresh record high 56,695, rising 1.5 percent, while auto, metal, consumer durables, private bank indices rose more than 1 percent each. On the other hand, Media index shed 1 percent.The Realty index soared by 4 percent as RBI's decision to cut repo rate is expected to lower EMIs, giving a boost to housing demand. The gold financing companies rose 5-7 percent after RBI said it will hike loan-to- value ratio limit to 85% for small ticket loans, according to information. The broader indices ended higher with Nifty Midcap index jumped 1.2 percent and Smallcap index added 0.8 percent.
Market This Week
●Friday’s gain helps market turn positive for the week,
●Market records weekly gain after giving negative returns for 2 consecutive weeks,
●Broader markets outperformance with Midcap index rising 3% Vs Nifty’s 1 percent,
●Nifty Bank registers a gain of nearly 2 percent this week,
●Except media, all sectoral indices post gains, realty is top gaining index
Rupee Close:
On 5 June'25,the Indian rupee pared initial losses and appreciated 11 paise to close at 85.68 against the U.S. dollar on Friday, after the Reserve Bank cut the repo rate by a higher-than-expected 50 basis points to prop up growth.
Forex traders reportedly stated the rupee traded on a flat-to-positive note as the RBI surprised the market with a jumbo rate cut. Besides, the rate cut supported by a phased 100 basis points CRR reduction will lower the borrowing costs and boost growth.Moreover, a surge in the domestic markets supported the rupee at lower levels, with both the indices settling with gains of over 1%.
Trading Guide:
Vinod Nair, Head of Research, Geojit Investments reportedly quoted as saying,the Indian stock market responded optimistically to RBI’s surprise and aggressive growth push policy. The tremendous rate cut and liquidity boost via the CRR cut is expected to facilitate swift transmission of lower rates, reinforcing RBI's strong commitment to fostering economic growth, boosting investment, and stimulating consumption. The RBI's neutral stance moderated expectations for future rate cuts and concerns linger over current tepid demand, as reflected in the unchanged GDP growth forecast for FY26. However, the immediate liquidity expansion and growth-focused policy measures are likely to support the investor confidence amidst the ongoing global uncertainties. Rate- sensitive sectors, including banking, real estate, automobiles, and consumer durables are leading the rally.
Market experts recommended five shares to buy-J K Cement, JM Financial, Welspun Corp, Sobha, and JSW Infrastructure.

(Business Correspondent)