The Indian stock market concluded the week on a positive trajectory, marking the third consecutive week of gains for both the Sensex and Nifty 50. This sustained upward movement was largely influenced by the Reserve Bank of India's (RBI) policy announcement, which took the market by surprise and instilled a sense of optimism among investors.

Market Performance

The Nifty 50 index closed at 25,003.05 on June 6, 2025, reflecting a gain of 1.02% for the day. Similarly, the Sensex closed at 82,188.99, up by 0.92%. Throughout the week, the benchmark indices remained range-bound but experienced a sharp surge on Friday, settling near their highest levels for the week.

Sectoral performance was predominantly positive, with rate-sensitive sectors witnessing significant buying activity. Realty, automobile, and banking stocks led the rally, driven by expectations of robust credit growth and increased consumer confidence. Financials and NBFCs also experienced gains, buoyed by anticipation that lower interest rates would improve borrowing conditions. In contrast, IT stocks lagged due to ongoing global uncertainties, particularly in the U.S. and European markets.

Key Market Drivers

Several factors contributed to the market's positive performance this week:

• RBI Policy Announcement: The RBI's unexpected decision to cut the repo rate by 50 basis points to 5.5%, along with a 100 basis point reduction in the Cash Reserve Ratio (CRR), exceeded market expectations and boosted investor confidence across various sectors.
• Favorable Sectoral Performance: Strong performance in rate-sensitive sectors, such as realty, automobile, and banking, fueled the overall market rally.
• Global Cues: Despite some global uncertainties, positive developments in trade negotiations and fluctuations in U.S. bond yields also played a role in shaping investor sentiment.

What to Expect Next Week

Looking ahead, several key factors are expected to influence the Indian stock market in the coming week:

• Macroeconomic Data: Market participants will closely monitor upcoming macroeconomic data releases, particularly CPI inflation, to assess demand patterns and anticipate future actions by the central bank.
• Monsoon Progress: The progress of the monsoon season and sowing activities will be closely tracked due to their potential impact on rural consumption and overall economic growth.
• Global Developments: Progress in global trade talks and fluctuations in U.S. bond yields will continue to be significant factors influencing investor sentiment.
• Technical Levels: According to Ajit Mishra, SVP, Research at Religare Broking Ltd., Nifty has approached the upper band of its consolidation range of 24,500–25,100. A decisive breakout above 25,200 could signal the beginning of a fresh uptrend, potentially moving towards the 25,600–25,800 zone. On the downside, the 24,400–24,600 range is expected to provide strong support during any corrective phases.

Overall Outlook

The Indian stock market is expected to maintain a positive bias in the near term, supported by the RBI's recent policy moves and expectations of continued economic growth. However, investors should remain cautious and closely monitor key economic indicators, global developments, and technical levels to make informed investment decisions.