Stock Market Today: Sensex Jumps 444 Points, Nifty Settles at 24,750, What Boosted Indian Stock Market Today?

Stock Market Today: The Indian stock market witnessed a sharp rally on Thursday, June 5, 2025, driven by broad-based buying and positive global cues. Both benchmark indices—the BSE Sensex and Nifty 50—rose over 1% in intraday trade, before paring some gains to close around 0.5% higher.

• The Sensex jumped 444 points (0.55%) to close at 81,442.04.
• The Nifty 50 ended 131 points (0.53%) higher at 24,750.90.

Midcap and smallcap stocks also joined the rally, with the BSE Midcap index up 0.39% and Smallcap gaining 0.65%. The combined market capitalization of BSE-listed companies increased by ₹3 lakh crore to touch ₹448 lakh crore.

What Drove the Market Rally?

Market analysts attributed today’s gains to the following five key factors:

1. Hopes of an RBI Rate Cut

Investors are pricing in a 25 bps rate cut in the upcoming RBI Monetary Policy review, with some analysts forecasting a 50 bps cut to spur credit growth.

• The Monetary Policy Committee (MPC) began deliberations on June 4, with the outcome expected on June 6.
• According to an SBI Research report, “A large rate cut could reinvigorate the credit cycle.”

A surprise move by the RBI could boost market sentiment further in the short term.

2. Weak US Dollar & Bond Yields

The US dollar weakened and bond yields fell amid signs of a slowdown in the US economy.

• The US ISM PMI data indicated economic softening.
• The 10-year bond yield dropped to 4.36%, making emerging markets like India more attractive for Foreign Institutional Investors (FIIs).

FIIs net bought Indian equities worth ₹1,076.18 crore on June 4 after several days of selling.

3. Optimism Around India-US Trade Deal

Speculation of a near-term India-US trade agreement lifted investor sentiment.

• US Secretary of Commerce Howard Lutnick hinted that a deal could be finalized within a month, much earlier than typical timelines.

The potential agreement could open up avenues for stronger bilateral trade and investment flows.

4. Rupee Strengthens Against US Dollar

The Indian rupee appreciated by 23 paise, trading at ₹85.68 per USD, according to Bloomberg data.

• A stronger rupee typically lowers import costs and boosts foreign investor confidence.

5. Strong Growth-Inflation Dynamics

India’s robust economic outlook, coupled with expectations of above-normal monsoons and easing inflation, is keeping market sentiment buoyant.

• BofA Securities’ Amish Shah cited nine structural growth drivers supporting long-term economic expansion.
• India has delivered a 7% CAGR in USD terms over three decades and is poised to remain a global leader in stock market performance.

“India is the top country globally in delivering consistent stock compounders,” Shah noted, even while expressing caution over near-term valuations.

Despite the rally, experts advise caution due to stretched valuations and global economic uncertainties. However, the medium-to-long-term outlook for Indian equities remains positive, supported by macroeconomic stability and policy momentum.

Disclaimer:
The information provided in this blog is for educational and informational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instruments. Stock market investments are subject to market risks. Past performance is not indicative of future results. Readers are advised to consult a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any losses or damages arising from the use of this information.

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