The stock market today, 16 June 2025, witnessed a significant rebound, with both Nifty and Sensex responding to a mix of factors including easing geopolitical tensions and renewed buying interest. This comes after an initial period of volatility following the Reserve Bank of India's (RBI) latest monetary policy decision on 6 June. While the RBI's announcements had initially spurred optimism, the market on 16 June shows a positive shift in sentiment.
Investors are now closely monitoring the evolving economic landscape and global cues. This article examines the impact of the RBI's policy changes on the stock market today, highlighting sectoral trends, investor sentiment, and what the future may hold for market participants.
Table of Contents:
- RBI’s Policy Decision: A Bold Step
- Stock Market Today: Immediate Reaction
- Market Sentiment and Expert Views
- Technical Outlook and Future Prospects
- Conclusion
The RBI cut the repo rate to 5.5% following a 50 basis point reduction by its Monetary Policy Committee, surprising market participants. Alongside, a significant 100 basis point reduction in the Cash Reserve Ratio (CRR) was declared, set to be implemented in stages from September 2025. The combined effect of these steps is projected to release ₹2.5 lakh crore in liquidity, boosting banks' capacity to offer credit and support economic activity.
- The repo rate cut is expected to lower borrowing costs for companies and individuals.
- The decrease in the Cash Reserve Ratio is projected to free up more capital for banks, encouraging them to increase their loan disbursements and stimulate broader credit growth.
- The RBI shifted its policy stance from “accommodative” to “neutral,” signalling a more balanced approach for the coming months.
These measures were introduced against a backdrop of easing inflation, with the CPI inflation rate at a multi-year low of 2.82% in May 2025. While the RBI's policy announcement on June 6th had initially spurred optimism, the stock market today, June 16th, closed sharply higher, indicating a strong rebound and positive sentiment.
On June 16th, the Sensex settled 677 points (0.84%) higher at 81,796.15, while the Nifty50 closed 227.9 points (0.92%) higher at 24,946.50. This marks a significant rebound, with both benchmark indices rising nearly 1% each. The market also saw positive movement in mid-cap and small-cap stocks, which settled with gains of 0.93% and 0.95% respectively, indicating a broad-based positive sentiment.
Sectoral Performance:
Today, all sectoral indices on the Nifty closed in the green.
- Top Gainers: The Nifty Financial Services index (FINNIFTY) saw a positive day, driven by strong performances from insurance and private banking stocks. SBI Life Insurance Company, HDFC Life Insurance Company, and ICICI Prudential Life Insurance Company were among the top gainers in the financial sector. Other notable gainers included UltraTech Cement and Tech Mahindra.
- Top Losers: While the overall market was positive, some individual stocks experienced declines. Tata Motors, Dr. Reddy's Laboratories, and Sun Pharma were among the top losers. Adani Ports also faced some selling pressure.
The Nifty IT index was up by 1.60%, with TCS gaining over 1.6% after securing a new deal. Nifty Oil & Gas also showed positive momentum, benefiting from rising crude oil prices driven by geopolitical tensions, which often aids upstream producers like ONGC.
The current market sentiment appears to be influenced by a combination of factors, including weekly Nifty50 F&O expiry, muted global cues, and profit booking after the recent rally. While the RBI's earlier rate cut was a strong growth signal, the "neutral" stance implies a more cautious approach to further rate reductions.
The RBI's projection for CPI inflation for the financial year 2025-26 at 3.7% and Real GDP growth forecast for FY2025 - 26 at 6.5% still suggests a constructive underlying economic outlook.
Technically, the Nifty closed above 24,900 on June 16th. Support is likely to be around 24,800 to 24,866, with a stronger support zone identified around 24,500–24,150. Resistance is now expected close to the 25,000-25,100 mark.
The RBI's latest monetary policy decision, particularly the substantial rate and CRR cuts on June 6th, undoubtedly set a positive long-term tone for the economy. The stock market today, June 16th, has shown a strong rebound, suggesting that investors are finding opportunities amidst broader market dynamics.
While the fundamental outlook for improved credit growth and corporate investment remains, investors are advised to monitor sectoral trends, global developments, and future policy updates closely, as the market navigates this period of renewed volatility.
Investors are advised to monitor sectoral trends, global developments, and future policy updates closely, as the market navigates this period of renewed volatility.