The Indian stock market is poised for potential shifts following overnight developments on June 6, 2025, encompassing global cues and domestic expectations. Several key factors are expected to influence trading sentiment as investors await the Reserve Bank of India's (RBI) monetary policy decision.
The Gift Nifty, an early indicator of Nifty 50's opening, is trading around 24,845.50, suggesting a potentially flat start. This comes after the Nifty 50 closed at 24,750.90 on the previous day, gaining 0.53%.
Global market cues present a mixed picture. US stock indices closed lower on Thursday, with the Dow Jones Industrial Average falling 0.25%, the S&P 500 losing 0.53%, and the Nasdaq Composite dropping 0.83%. A slump in Tesla shares particularly impacted Wall Street. Conversely, Asian markets have generally opened higher, driven by data indicating resilience in the US labor market. Japan's Topix rose 0.5% and Australia's ASX 200 also climbed 0.5%.
One significant factor is the anticipation surrounding the RBI's monetary policy announcement. Economists widely expect the Monetary Policy Committee (MPC) to cut the repo rate by 25 basis points, bringing it down to 5.75% from 6%. This would mark the third consecutive repo rate cut, aimed at supporting economic growth. Rate-sensitive sectors like banking, realty, and auto are under close scrutiny, with their recent outperformance possibly reflecting expectations of this rate cut. However, the RBI's commentary alongside the decision will be critical in shaping market direction, especially given mixed global signals.
Developments in US-China trade relations are also playing a crucial role. Optimism surrounding potential trade talks between the two economic giants has previously boosted market sentiment. The White House has hinted at a possible meeting between President Donald Trump and Chinese President Xi Jinping to further these discussions. However, overnight news of progress in tariff talks did little to prevent US market declines, suggesting that this factor's influence may be wavering.
Foreign portfolio investors (FPIs) have been net sellers for three consecutive sessions, reflecting some caution amidst global uncertainties. On a recent Tuesday, FPIs sold shares worth ₹2,589.47 crore. In contrast, domestic institutional investors (DIIs) have been net buyers for the past eleven sessions, providing a supportive domestic investment environment.
Technically, the Nifty's near-term support is seen around 24,500. A close below this level could lead to a larger correction towards 24,000. Conversely, if the index remains above 24,500, it could target the 24,700-24,750 range. The India VIX, a measure of market volatility, was down, indicating reduced fear among market participants.
In currency markets, the Rupee weakened against the US dollar, closing at 85.61, reflecting dollar strength and equity outflows. Most Asian currencies were also trading lower against the dollar.
