RBI MPC Meeting: Here’s What Indian Stock Market Expect from Central Bank? Experts weight in

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will hold their its two-day meeting in Mumbai to Assess the current Interest Rate Outlook.

Market analysts are rightly anticipating a rate cut in the upcoming RBI mpc announs on Friday. However, Experts Believe That A 25 BPS Cut Seems Most Likely, There’s a Strong Case for a Deeper 50 BPS Cut to Further Support Credit Credit Growth and Economic Momentum.

The RBI has, in the past, opted for bold 50 bps cuts during 2012, 2015, and 2020, to counter domestic superdowns or to frontload support for Growth. However, the global backdrop today is markedly different.

Over the Past Six Months, The Us Federal Reserve has been its benchmark rate steady at 4.25%-4.50%, after a brief easing cycle in late 2024. Inflation Pressures, The Interest Rate Differential Between India and the Us has Alredy Narrowed from 225 BPS to 175 BPS SINCE DECEMBER 2024.

“Any aggressive rate cut by the rbi could further compress this spread, potentially triggering capital outflows and exchange rate pressure. Said, there’s a Compleing Domestic Case For Easing, Protte Consumption Growth Has Moderated, MSME Credit Expaniation has Slowed, and Investment Momentum Needs A Boost. Future meetings, would be the most prudent path forward, “said Mahendra Patil, Founder and Managing Partner, MP Financial Advisory Services LLP.

RBI mpc rate cut not the only focus

Divam Sharma, Co-Founder and Fund Manager at Green Portfolio PMS Around RBI Mpc Meet Says That The Central Bank will more focus on Economic Growth Amid Rising Geopolitical Tensions.

“We expect the rbi to cut rate this time. Promoting Domestic Businesses and Manufacturing Backets Increasingly Important. Such as 5G infrastructure, defense, and auto ancillaries. Capital expansions, “Sharma said.

Soft inflation data and moderate demand trends give the RBI Room to Act. However, Global Uncertainteies, Including Us Policy and External Trade Dynamics, Cold Influence The Tone of the Tone of the Policy Statement, Says Pranay Aggarwal, Director and CEO of Stoxkart Firm.

According to Market Analysts, The Markets is more Likely to Trade in Green If the Central Bank Decides to Opt a Rate Cut on Friday, June 6. Sector like banking, real estate, and automobiles can find in phocus Tomorrow.

“If the reserve bank of India announs a rate cut tomorrow, I anticipate a positive response from the right markets, particularly in rate-sensitive sector such as Banking, Real Estate, Real Estate, and Automobiles. Reduction in the repo rate would lower borrowing costs, potentially stimulating consumer demand and encouraging corporate investments, ”Said Aggarwal.

Looking at earlier trends, The Indian Stock Market Remained Volatile after the RBI’s Announcement in February. On 7 Feb 2025, The BSE Sensex Slipped By 328 Points, or 0.4%, Reaching an INTRADAY Low of 77,730.37. Similarly, the nifty 50 fell by 110 points, also down 0.4%, to settle at 23,493.60.

Rate-sensitive sector showed a strong response to the RBI’s policy change. Both the nifty bank and nifty financial services indices declared by more than 0.4% Each. Meanwhile, nifty psu bank dropped 0.8%, and nifty private bank was down 0.4%. On the other hand, nifty auto rose by 0.6%, and nifty realty climbed 1%.

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