The Sensex soared by 1,618.85 points, closing at a record high of 76,693.36, while the Nifty rose 468.75 points to end the day at 23,290.15. This marked the third consecutive session of gains for both indices, reflecting a buoyant mood among investors driven by favorable economic signals and global cues.
The RBI’s decision to maintain the interest rate at 6.5% for the eighth straight time provided a significant boost to market sentiment. RBI Governor Shaktikanta Das’s announcement of a revised GDP growth projection for FY25 at 7.2% further fueled optimism. Investors viewed this as a positive sign of economic stability and potential growth, contributing to the market rally.
On the investment front, the dynamics between FIIs and DIIs played a crucial role. On June 6, FIIs net sold equities worth ₹6,867 crore, while DIIs net bought shares valued at ₹3,718 crore. Despite the net selling by FIIs, the market remained resilient, buoyed by strong buying activity from DIIs. This balance between foreign and domestic investments underlined a robust confidence in the market’s future prospects.
Global market trends also had a significant impact. European shares opened just off record highs as traders awaited US jobs data expected to influence Federal Reserve policy. The ECB policy easing cycle further contributed to the positive sentiment.
The Stoxx 600 index, although slightly lower by 0.1%, had hit record peaks earlier in the week. Technology stocks showed gains, while real estate and insurance sectors saw minor declines due to the ECB’s cautious approach to rate cuts. In the US, stock futures held steady, and Bloomberg’s dollar gauge eased, reflecting a cautious but optimistic outlook among investors.
The anticipation of rate cuts has been escalating, fueled by weaker-than-forecast US economic data and recent rate cuts by the Bank of Canada and the ECB. Bond investors, in particular, have gained more conviction in their trades, with a Bloomberg gauge of global government bonds posting its longest rising streak since November. Homin Lee, a senior macro strategist at Lombard Odier, noted that softer US data, including jobless claims and labor costs, suggested a “quiet rebalancing” in the economy, potentially indicating a slowdown in service sector inflation.
On the domestic front, all sector indices closed in the green, with the IT sector leading the gains, up by 3.37%. The Auto, Oil & Gas, Metal, and Realty sectors each rose more than 2%, highlighting the broad-based nature of the rally. The broader market also reflected this positive sentiment, with the BSE SmallCap index rising by 2.18% and the BSE MidCap index climbing by 1.28%.
Among individual stocks, Mahindra & Mahindra, Wipro, Tech Mahindra, Infosys, and Tata Steel emerged as top gainers. Only two stocks on the Nifty 50—SBI Life and Tata Consumer Products—ended in the red. The performance of these key stocks underscored the overall bullish sentiment across the market.
Looking ahead, investors are keenly watching the upcoming budget and the government’s approach to fiscal consolidation. The expectation is for strong macro fundamentals, with the government aiming to maintain a fiscal deficit to GDP ratio of 5.10%. This, coupled with the RBI’s favorable growth-inflation balance projection, sets a positive tone for the market’s future trajectory.
