RBI Rate Cut Boosts Market Mood

🏦 RBI Rate Cut Boosts Market Mood — FII Inflows & Monsoon Being Watched

The Reserve Bank of India (RBI) has delivered a welcome surprise by announcing a rate cut in its latest monetary policy meeting, giving a positive jolt to Indian equity markets. This move, aimed at boosting economic activity amid global uncertainties, has sparked optimism among investors and analysts alike.

📉 What the RBI Announced

In its June 2025 policy update, the RBI cut the repo rate by 25 basis points, bringing it down to 5.75%. This is the first cut in nearly a year, and it reflects the central bank’s confidence in moderating inflation and a stable economic outlook.

    Reasons for the cut:
    Falling core inflation numbers
Healthy fiscal indicators
The need to stimulate domestic demand

  

📈 Market Reaction

Immediately after the announcement, Sensex and Nifty surged over 300 and 100 points respectively, with banking and realty stocks leading the rally.

🌐 FII Inflows Strengthen

Foreign Institutional Investors (FIIs) poured over ₹10,000 crore into Indian equities in the first week of June alone, driven by:

Political stability after the 2024 elections
Strong Q1 FY26 earnings outlook
India’s positioning as a resilient emerging market

🌧 Monsoon Watch: A Key Factor Ahead

Investors and policymakers are closely watching the progress of the monsoon, which plays a critical role in the rural economy. A normal monsoon will:

Support agriculture-linked sectors
Boost rural demand
Keep food inflation in check

🧠 Expert View

Experts believe that the combination of rate cuts, strong liquidity, and global tailwinds could support further market gains—though they warn of potential volatility from global oil prices and Fed policy changes.