Something you should know how markets can react to REPO RATE CUT,

As of June 6, 2025, the Reserve Bank of India (RBI) has announced its 50 basis points (bps) repo rate cut, reducing it to 5.50%. This anticipated move is driven by subdued inflation—Consumer Price Index (CPI) inflation stood at 3.2% in April, strong economic growth with GDP at 6.4 to 6.8% as per estimates,
RBI sets CRR ratio at 3% lower than estimated 4% big positive for financial markets to cheer this aims to stimulate economic growth amid global uncertainties . RBI further stated CRR reduction will boost 2.5 trillion rs liquidity.

Market Trends:

Indian equities have shown positive momentum ahead of the policy announcement, With current rate cut by 50bps and CRR cut by 100bps market is expected to show strong momentum with 24000 remains immediate support.

The Indian rupee experienced slight depreciation, touching 86.02 per US dollar, influenced by equity outflows and cautious positioning ahead of the RBI’s decision

Sectoral Outlook:

Banking & Financial Services: Expected to benefit from lower borrowing costs, potentially enhancing credit growth.

Real Estate & Automobiles: Rate cuts may reduce loan EMIs, boosting demand in these interest-sensitive sectors .

Renewable Energy: Companies like TD power and Waaree eng are poised for strong performance, supported by favorable policies and increased focus on clean energy

Consumer Durables – With easy liquidity flow and early monsoon, consumer discretionary spending might increase which can result in sectoral growth.

Data Snapshot:

• Repo Rate : 5.50%

• CPI Inflation (April 2025): 3.2%

• Q4 FY25 GDP Growth: 7.4%

• CRR – 3%