The Reserve Bank of India’s interest rate decision, macroeconomic data announcements, and global trends are expected to drive stock market movements this week, according to analysts. Foreign Institutional Investor activity and developments on the tariffs front will also influence investor sentiment. Ajit Mishra, SVP, Research at Religare Broking Ltd, said, “Looking ahead, all eyes will be on the outcome of the RBI’s Monetary Policy Committee meeting scheduled for June 6.
Additionally, with the new month beginning, participants will track high-frequency data including auto sales numbers and other economic indicators. Updates on the progress of the monsoon and the trend in FII flows will also be closely monitored.”
Global developments in the US bond market and updates on ongoing trade negotiations will continue to impact investor sentiment, Mishra added. The Indian economy grew at a faster pace than expected in the last quarter of the 2024-25 fiscal year, achieving a 6.5 percent growth rate for the year and increasing its size to USD 3.9 trillion.
Interest rates and market movements
This strong performance suggests India could surpass Japan to become the world’s fourth-largest economy by FY26. The economy expanded at 7.4 percent in January-March, the fourth and final quarter of FY2024-25, reflecting a strong cyclical rebound driven by rising private consumption and robust growth in construction and manufacturing.
PMI data for manufacturing and services sectors, set to be released this week, will also influence trading in the market. Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd, said, “This week, interest rate-sensitive sectors—particularly PSU banks—are likely to remain in focus amid growing hopes of an RBI rate cut. Additionally, the release of monthly auto sales and volume data could trigger sector-specific moves in the automobile space.”
Last week, the BSE benchmark declined 270.07 points or 0.33 percent, while the NSE Nifty dipped 102.45 points or 0.41 percent.
Vinod Nair, Head of Research at Geojit Investments Limited, said, “The market is pricing in a 25 bps cut, which will improve the outlook for rate-sensitive sectors. The positive macroeconomic scripts can boost investor sentiments, but stability in the broader market will be contingent on strong earnings growth and receding trade tensions.”
This week is set to be pivotal for investors, with multiple domestic and global factors poised to shape market trends.
