RBI’s Cash Boost Seen Spuring Indian Stocks to New Record High

RBI’s Surprise Rate Cut and Liquidity Injection Propel Indian Stock Markets to Record Highsbloomberg.com

On June 6, 2025, the Reserve Bank of India (RBI) implemented a significant monetary policy shift by reducing the repo rate by 50 basis points to 5.5% and lowering the Cash Reserve Ratio (CRR) by 100 basis points to 3%. This dual action is expected to inject approximately ₹2.5 lakh crore into the banking system, aiming to stimulate economic growth and enhance liquidity .

The immediate market response was overwhelmingly positive. The BSE Sensex surged over 700 points, closing at 82,163.22, while the Nifty 50 rose by 0.94% to 24,982.25. The Nifty Bank index reached a record high of 56,644, reflecting investor optimism .

Sector-wise, banking and financial stocks led the rally. HDFC Bank’s shares climbed 2.4% to a new peak of ₹1,996.3, contributing significantly to the gains in major indices . Non-Banking Financial Companies (NBFCs) such as Bajaj Finance and Shriram Finance also saw substantial increases, benefiting from the anticipated boost in credit growth .

The RBI’s policy stance shifted from “accommodative” to “neutral,” indicating a data-dependent approach moving forward. Analysts view these measures as a strategic move to frontload growth amidst global uncertainties and subdued inflation, which has been revised down to 3.7% for the fiscal year ending March 2026 .