stock market
Friday was a great day for the Indian stock market. On one hand, several announcements were made by RBI in the morning to increase foreign investment and to strengthen the availability of foreign currency (Forex), on the other hand, in the evening, better than expected figures regarding GDP growth rate came out. In such a situation, the question is arising that what will happen in the coming days from these two signals? stock market Will I come back in spring?
Let us first know what decisions were taken by RBI and how were the GDP figures?
1. reserve Bank of India (RBI) has maintained the repo rate at 5.25% and has kept the monetary policy stance neutral. This time the focus of RBI was on increasing foreign investment. Under this, the Central Bank has made 7 big announcements for foreign investors and NRIs.
- Long-term capital gains tax on FII investments in government securities will be abolished from April 1, 2026.
- New government securities of 15, 30 and 40 years were included in the Fully Accessible Route (FAR), which will increase the access of foreign investors.
- The concentration limit imposed on foreign portfolio investors (FPIs) under the general route was removed.
- NRIs and OCIs were allowed to invest more in listed shares without SEBI registration.
- Concessional forex swap window for ECB loans of PSUs extended till September 30, 2026.
- The hedging cost support provided to banks on raising FCNR (B) deposits will also continue till September 30, 2026.
- The time limit for bringing export earnings to India has been reduced from 15 months to 9 months.
The objective of these steps is to attract foreign capital, increase dollar inflow and strengthen Indian financial markets.
2. Strong GDP figures
India’s economy has registered strong growth in the financial year 2025-26. According to the data released by the Ministry of Statistics and Program Implementation, the country’s GDP growth rate increased to 7.7%, which was 7.1% in the financial year 2024-25. These figures indicate the strength of the economy.
What was the effect?
1. Stock market
After volatile trading on June 5, Indian stock markets closed with slight weakness. Investors kept an eye on the monetary policy of RBI and its decisions, after which limited reaction was seen in the market. At the end of trading, Sensex slipped 116.67 points or 0.16% and closed at 74,243.34, while Nifty fell 49.85 points or 0.21% to 23,366.70. A total of 1,966 shares rose in the market, 2,049 shares declined, while 197 shares closed without any change.
2. Rupee strengthened
The Indian rupee showed great strength against the dollar on Friday. After the monetary policy review of RBI, the rupee rose by 56 paise and closed at 95.18 per dollar. Investor confidence has been strengthened by the measures taken by the central bank to attract foreign investment and increase the availability of foreign exchange. Market experts believe that these steps of RBI can provide further support to the rupee in the coming days and can prove helpful in increasing foreign capital inflow.
What will be the effect of inflation?
Experts say that the result of monetary policy was as expected. The rupee strengthened due to the supportive measures announced by the RBI Governor. However, due to cut in growth estimates and balanced outlook on inflation, investors booked profits. But the rise in currency may improve market sentiment in the near term, but inflationary pressure and strengthening of bond yields may impact both foreign and domestic investment. The reason for this is that it may be challenging to maintain this momentum going forward. Tension in West Asia, high crude oil prices, inflation and weather-related uncertainties may increase pressure on the Indian economy in the future.
How will the market be in future?
Market experts believe that at present, better GDP figures and RBI’s pro-growth stance are creating a positive environment for the Indian market. If inflation remains under control and global conditions do not deteriorate much, then there may be a new boom in the stock market, investment and business activities in the coming months. In simple words, these two big signals from the economy have brought a new wave of expectations in the market and this can prove to be a game changer for the Indian market in the coming times.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
