How will RBI's policy decision impact market? Analysts prefer these stocks

RBI policy decision: RBI governor Sanjay Malhotra announced to cut 50 bps repo rate and 100 bps CRR; here's how analysts view the move

The Reserve Bank of India (RBI), in a major move on Friday, June 6, 2025, slashed the repo rate by 50 basis points (bps) to 5.5 per cent and it also shifted the policy stance to "Neutral" from "Accommodative". Additionally, the Monetary Policy Committee (MPC) cut the cash reserve ratio (CRR), the percentage of a bank's total deposits that must be maintained in cash with the RBI, by 100 bps to 3 per cent from earlier 4 per cent. 

 

The central bank now projects the consumer price index (CPI) for FY26 at 3.7 per cent overall, revised down from 4 per cent. It has maintained the country's gross domestic product (GDP) growth forecast for FY26 at 6.5 per cent. 

 

How did Sensex and Nifty react to RBI's policy decision?

Buoyant by RBI's policy decision, Indian equities edged higher. Around 11:50 AM, Sensex was up 754 points or 0.93 per cent at 82,195.38. Similarly, Nifty50 gained 245 points or 0.99 per cent at 24,997. CATCH LIVE UPDATES 

How do market experts view RBI's policy decision?

Naveen Kulkarni, chief investment officer, Axis Securities PMS

We see tailwinds for net interest margins (NIMs) given the improving systemic liquidity and the deposit rate cuts taken by most banks. However, even as H1FY26 will see a more pronounced impact of the rate cut on NIMs, some respite is expected over H2FY26.  ALSO READ | RBI cuts repo, CRR: 5 rate sensitive stocks to buy with up to 26% upside

 

VK Vijayakumar, chief investment strategist, Geojit Investments

This big rate cut will impact the margins of the banks and, therefore, bank stocks will be under pressure in the near-term. However, the credit growth that this rate cut will hopefully stimulate will compensate for the dip in margins.

 

The change in monetary stance from accommodative to neutral also indicates that more rate cuts are unlikely unless the situation warrants.

 

Sujan Hajra, chief economist & executive director, Anand Rathi Group

Overall, the policy decision is constructive for both equity and debt markets. In equities, interest-sensitive sectors are poised to benefit. While lower rates and policy transmission could have weighed on bank net interest margins in the near term, the sizeable CRR cut provides a significant offset, making this a particularly positive move for banks.

 

Vinit Bolinjkar- head of research, Ventura

RBI's move brings major relief to borrowers, with EMIs set to drop further following a cumulative 100 bps cut since February. The MPC's stance shift and CRR cut will offer timely support to the economy and markets amid global uncertainties.

What are charts suggesting after RBI's policy decision?

"The policy outcome is a positive surprise that could lead to a resumption of an uptrend in the Banking and NBFC space which has been consolidated in a range since last one month. The 20 DEMA in Bank Nifty at 55,400 will be sacrosanct support for the near term while we could see the index rallying towards 57,000-57,400 in the near term," said Ruchit Jain, Head - technical research at Motilal Oswal

Where to invest after RBI's policy decision?

Kulkarni of Axis Securities PMS prefers banks with promising growth prospects, healthy deposit franchises, stable asset quality metrics, and strong and steady management teams. 

 

His picks include HDFC Bank, ICICI Bank, and Kotak Bank among the larger private banks, and City Union Bank among the mid-sized banks.