The week spanning June 1st to June 7th, 2025, proved to be a landmark period for the Indian stock market, witnessing a significant and largely unexpected intervention from the Reserve Bank of India (RBI). This pivotal monetary policy action injected a robust dose of optimism into the market, propelling benchmark indices to new highs and setting a distinctly positive tone for the sessions ahead. Despite some global uncertainties, the market celebrated a strong rally, particularly in rate-sensitive sectors.
Table of Contents
- Nifty and Sensex End Week on a Strong Note
- Factors Influencing the Market's Bullish Trajectory
- Sectoral Performance: Rate-Sensitive Sectors Lead the Charge
- Top Performing and Losing Stocks of the Week
- Major Stock News of the Week
- FII and DII Activity: DIIs Provide Strong Buffer
- Other Factors Influencing the Market
- Outlook for the Week Ahead (Starting June 9th)
- Final Takeaway
Both Nifty 50 and Sensex concluded the week on a remarkably strong note, primarily attributed to a broad-based rally following key economic announcements.
- Nifty 50 advanced by 1.02%, gaining 252 points to settle at 25,003.05 on Friday, 6 June 2025. This marked a decisive breach above the psychological 25,000 mark.
- Sensex surged by 0.92%, up 746.95 points to finish at 82,188.99 on Friday, 6 June 2025. This achievement marked the Sensex's third consecutive weekly rise.
Wrap-up: Benchmark indices concluded the week with impressive gains, driven by a strong underlying bullish sentiment.
The week's robust market performance was unequivocally driven by the Reserve Bank of India's (RBI) latest monetary policy announcement.
- RBI's Aggressive Monetary Easing: A larger-than-anticipated 50 basis point (bps) reduction in the repo rate to 5.5%, coupled with a substantial 100 bps reduction in the Cash Reserve Ratio (CRR) to 3%.
- Lowered Inflation Expectations: RBI revised downward inflation expectations to 3.7% for FY25/FY26, aided by prospect of a normal monsoon; retail inflation cooled to 4.3% in April.
- RBI's 'Neutral' Stance: Signalling a clear commitment to aggressive growth support while maintaining inflation control.
- Robust DII Activity: Domestic Institutional Investors (DIIs) showed consistent and strong buying, significantly offsetting FII outflows.
- Easing Market Volatility: India VIX slipped 4.21% to 15.08, signalling lower market anxiety.
Wrap-up: The RBI's "jumbo surprise" injected confidence, fostering a growth-oriented environment and overriding earlier cautious sentiments.
Rate-sensitive sectors, in particular, reaped significant benefits from the RBI's accommodative policy decisions.
- Nifty Realty: Surged by 2.80% (and even 4.74%).
- Nifty Auto: Gained 1.14%.
- Bank Nifty: Surged 1.47% to a record high of 56,578.40.
- Broader Finance Sector: Gained 1.79% (FinNifty surged 1.75%).
- Nifty Metal: Also saw substantial gains, adding 1.56% (and 2%), performing well despite global tariff concerns.
Under Pressure: While the rally was broad, there were relatively fewer sectors under significant pressure this week, indicating widespread positive momentum.
Wrap-up: Financials, auto, and realty sectors clearly demonstrated the powerful impact of the RBI's rate cuts, while even metals showed resilience against external factors.
The week's rally was broad-based, yet certain individual stocks demonstrated exceptional performance.
Top Gainers (Friday, June 6, 2025):
Top Losers (Friday, June 6, 2025):
Wrap-up: Rate-sensitive stocks dominated the gainers' list, directly benefiting from the RBI's accommodative policy.
The primary catalyst for individual stock performance was the broader market sentiment driven by the RBI.
- Rate-Sensitive Stocks Rally: Financials, Autos, and Realty stocks saw significant buying interest following the repo rate and CRR cuts.
- Banking Sector Breakout: Bank Nifty's record high close indicates renewed confidence in the banking sector.
- SME IPO Activity: Several SME IPOs successfully listed, though Ganga Bath Fittings IPO saw a muted response, indicating increased investor discernment.
- Specific Stock Drivers: IDFC First Bank's 7.11% surge (7-month high), ICICI Lombard's 6.85% rise, and Muthoot Finance's 6.61% gain.
Wrap-up: Stock-specific movements were largely influenced by the overarching positive policy actions and broader sector sentiment.
Institutional investor behaviour displayed contrasting trends this week, with DIIs providing critical market support.
- Foreign Institutional Investors (FIIs):
- Were net sellers in the cash segment for the week, with total net sales amounting to ₹3,565.9 crore.
- Daily activity for FIIs fluctuated between net sales and net purchases.
- Domestic Institutional Investors (DIIs):
- Demonstrated robust and consistent net buying throughout the week, accumulating a substantial ₹25,513.5 crore in the cash segment.
- Maintained strong net inflows every day of the week.
Wrap-up: Strong DII participation proved instrumental in offsetting FII outflows, cushioning the market and demonstrating increasing domestic resilience.
Beyond the influential domestic policy actions, a confluence of economic indicators and global developments contributed to the overall market sentiment.
- Cooling Inflation & Positive Monsoon Outlook: Supported the RBI's decision to cut rates, providing a positive domestic economic backdrop.
- Indian Rupee Resilience: Appreciated by 16 paise to close at 85.64/$ despite volatile trade.
- Safe-Haven Demand: Silver prices notably breached the ₹1 lakh per kilogram mark for the first time, reflecting some cautious hedging amidst global uncertainties.
- Stable Crude Prices: Brent crude saw a slight rise, supported by geopolitical unrest (Ukraine drone strikes on Russian oil facilities), though this poses a future inflation challenge for India.
- US Markets Gains: S&P 500, Dow Jones, and Nasdaq Composite generally gained ground.
- India-US Trade Talks: Positive talks provided a boost to Pharma and Healthcare sectors.
Wrap-up: A strong domestic policy catalyst combined with easing inflation and DII support overshadowed global uncertainties, though a segment of investors still sought safe-haven assets.
As the market transitions into the second week of June, several key economic data releases and corporate earnings announcements are anticipated to provide further direction.
- Economic Data:
- June 11: M3 Money Supply Year-on-Year (Y-o-Y)
- 12 June: Inflation Rate Year-on-Year (Y-o-Y) (Crucial indicator post-RBI rate cut)
- June 12: Passenger Vehicles Sales Year-on-Year (Y-o-Y)
- June 13: Forex Reserves
- June 13: Balance of Trade
- Earnings: Final batch of Q4 FY25 results to be released throughout the week.
- Key Market Levels:
- Nifty 50: Support at 24,857, 24,767; Resistance at 25,149, 25,239. Experts suggest potential to touch 25,600 and 26,000 if 25,000 holds.
- BSE Sensex: Support at 81,716, 81,424; Resistance at 82,662, 82,954.
- Bank Nifty: Support at 56,078, 55,769; Resistance at 57,078, 57,388. Expected range: 55,300 – 56,200.
Wrap-up: Market sentiment is likely to consolidate with a positive bias, with the inflation data on June 12th being a critical determinant of near-term direction. Investors should monitor key economic data and the last leg of earnings reports for directional cues.
The week of 1 June to 7 June 2025 was a defining period for the Indian stock market, primarily shaped by a significant and unexpected policy intervention from the Reserve Bank of India. The central bank's aggressive monetary easing acted as a powerful catalyst, igniting a broad-based rally and propelling benchmark indices to new highs.
The robust buying from Domestic Institutional Investors (DIIs) provided crucial market stability, absorbing FII outflows and highlighting the increasing strength of India's domestic capital markets. While global uncertainties persist, the overall sentiment remains cautiously optimistic, driven by strong domestic policy support and growing investor confidence.