Stock Market Today, June 5: Indian stocks are poised to start on a positive note on Friday as traders closely watch the impending monetary policy decision from the Reserve Bank of India (RBI). The two key benchmarks closed slightly up. Investors will be closely following the central bank’s stance on the monetary policy, inflation projection and steps to arrest the falling Indian rupee. The RBI-led MPC is widely expected to maintain its policy repo rate at 5.25%. All eyes will, however, be on RBI governor Sanjay Malhotra’s comments for clues on rate policy going forward, stance on the inflation target and views on the struggling rupee, which has emerged as the worst performer in the Asian markets in the year.
GIFT Nifty hints at a strong opening for Dalal Street
There are some early indications of a modestly positive start for domestic stocks.
The GIFT Nifty is up 32 points at 8:03 am to 23,570.50, indicating a positive opening for benchmark indices. The index hit a high and low of 23,574.50 and 23,439.50 in intraday trade prior to the RBI policy at 10:00 am.
The direction of the market will be largely driven by the decision to be taken by the central bank during the announcement, more importantly on interest rate-sensitive sectors like banking, automobiles and real estate.
The RBI policy is in focus
The central bank is expected to keep its policy unchanged at 5.25% due to its cautious stance, as global worries and inflation are on the higher side.
The apex bank needs to strike a balance between concerns about high inflation and fears of low growth in a rigid global rate structure.
Markets will be keen to see the inflation forecast, growth forecast and currency stability comment besides the interest rate announcement.
Global oil prices and Indian market significance
Global oil prices continue to be one of the primary worries for policymakers and investors alike.
Brent futures have rallied strongly after hostilities in West Asia, hurting India’s import bill and domestic inflation significantly. The rise in oil prices, which impacts corporate profits, consumer spending and government finances heavily, is the central pivot for equity markets.
Foreign Investors remain cautious
Foreign investors remain cautious due to ongoing concerns about inflation, a weakening rupee, and geopolitical uncertainties. Foreign portfolio investors (FPIs) have taken out a substantial amount from Indian equities in 2026 on a flight to safety. Market experts believe that RBI policy communication will be the most important factor determining investor sentiment in the coming week.
Benchmark indices end previous session with modest gains
Indian equities ended Thursday’s volatile trading session with modest gains. The Nifty 50 index was up 10.95 points (0.05%) at 23,416.55. The BSE Sensex closed higher by 13.84 points (0.02%) at 74,360.01. Broader markets outperformed. Nifty Midcap 150 gained close to 0.5%, and Nifty Smallcap 250 gained nearly 0.6%. The Nifty Smallcap 250 also extended its gains for the third straight day.
Wall Street reach new highs
US stocks mixed overnight. The Dow Jones Industrial Average was trading at record highs. The S&P 500 traded higher while the Nasdaq Composite faced pressure from technology stocks.
Asian stocks slump
Asian stocks fell in the morning session on Friday as poor performance from global tech stocks coupled with geopolitical issues weighed down the markets. The Kospi and Nikkei slumped while the S&P/ASX 200 traded down.
Three RBI MPC scenarios to watch today
Univest experts expect the RBI policy decision to be the key trigger for Indian equities. A mildly positive start is expected on a cautious note, supported by Brent crude, which may provide some pullback and reduce inflationary worries.
Scenario A: Status quo with rate hold (70% chance)
Status quo on the repo rate. If the RBI goes with the status quo, then the Nifty 50 will attempt to move towards the 23,550-23,600 zone.
Scenario B: Rate hold but hawkish commentary (20% chance)
If we see a hawkish tone and talk of rate hikes going ahead, that could trigger volatility and see Nifty fall back to the 23,300 support level.
Scenario C: 25 bps surprise rate hike (10% probability)
A surprise rate hike would be a big domestic negative surprise which could trigger a broad-based selloff and test the 23,100-mark for Nifty.
Crude oil pullback provides some relief
The recent decline in crude oil prices has come as a much-needed cushion to Indian markets, easing inflation concerns, reducing pressure on the rupee and improving the outlook on the import bill.
Key points investors to watch today
RBI MPC policy decision (10:00 AM IST)
Governor Sanjay Malhotra’s post-policy comments
RBI’s inflation and GDP growth projections
Price movements of crude oil
Rupee’s response to policy decision
Performance of banking, auto, and real estate stocks
Overseas investor activity and global market cues
This RBI policy decision will probably be a significant factor on Dalal Street. Even if the rates do not change, the market will be expecting signals from the RBI about inflation risks, growth and future direction of interest rates.
(Disclaimer: This article is for informational purposes only and should not be considered investment advice. The views, opinions, and recommendations expressed herein are those of the respective experts. Readers are advised to consult a qualified financial advisor before making any investment decisions.)
Priyanka Roshan is a business writer and assistant editor at the NewsX website who tracks everything from stock market swings and corporate earnings to personal finance trends and policy shifts. Known for turning fast-moving business developments into sharp, reader-friendly stories, she combines speed, accuracy, and a data-driven approach to break down complex financial news for everyday audiences.
With over 9.5 years of newsroom experience, Priyanka has worked with leading media organisations, including Moneycontrol, Times Now, and Ping Digital, covering diverse beats such as business, politics, technology, auto, travel, sports, and the world. From live breaking news desks to SEO-led digital storytelling, she specialises in creating engaging content that keeps readers informed without overwhelming them.
