Daijiworld Media Network – Mumbai

Mumbai, Jun 7: Despite global tensions and fears of a tariff war, Indian markets displayed remarkable resilience this week, ending nearly one per cent higher. The rally was largely driven by a surprise move from the Reserve Bank of India (RBI) and strong domestic cues, analysts said.

After a mostly range-bound session through the week, benchmark indices jumped sharply on Friday, with the Nifty closing at 25,003 and the Sensex at 82,118.99 — near weekly highs.

“The RBI’s unexpected 50 basis points repo rate cut along with a 100 basis points CRR reduction clearly signals a pro-growth stance,” said Ajit Mishra, SVP, Research, Religare Broking Ltd. He noted that the shift in policy stance from ‘accommodative’ to ‘neutral’ also came earlier than expected, boosting investor confidence.

Sectorally, rate-sensitive stocks led the uptrend with real estate, auto, and banking sectors witnessing strong buying. Financials and NBFCs too gained on hopes of improved credit demand in a low-interest environment.

In contrast, IT stocks lagged due to ongoing uncertainties in Western markets. However, midcap and smallcap indices surged between 2.8% and 4%, outperforming the broader market and signalling rising risk appetite.

Vinod Nair, head of research, Geojit Financial Services, said strong Q4 GDP data, healthy GST collections, and a favourable monsoon outlook have encouraged investors to focus on interest-sensitive sectors like real estate, FMCG, retail, and financials.

Profit-booking was seen at intervals, driven by lingering global concerns such as China's rare earth policy and anticipation over the US inflation print. Still, the RBI's bold move, backed by steady GDP and easing inflation, is expected to support investor sentiment.

Looking ahead, markets will closely track key macroeconomic indicators, especially CPI inflation data, to anticipate the RBI’s next move.