Indian stock market continues to assess 2 big policy moves to boost economy

The banal marketplace saw 2 large argumentation moves this week that could importantly interaction India's economical trajectory — the Union Budget 2025, which introduced taxation cuts to boost depletion and investment, and the RBI's 25 bps complaint cut, signalling a displacement towards monetary easing, experts said connected Saturday.

These measures collectively purpose to fortify economical maturation portion maintaining fiscal discipline. On the markets front, Nifty 50 is up 1 per cent, Nifty Midcap is up 0.9 per cent and Smallcap scale is up 0.7 per cent.

The Indian banal marketplace closed little connected Friday arsenic investors continued to measure the RBI's Monetary Policy Committee (MPC) determination to chopped the repo complaint by 25 ground points (bps).

However, the cardinal slope maintained its argumentation stance, keeping a neutral approach. The Monetary Policy Committee (MPC) decided to trim the repo complaint from 6.5 per cent to 6.25 per cent.

The Sensex yet settled astatine 77,860, down by 198 points. The Nifty scale fluctuated betwixt 23,694 and 23,443, earlier closing astatine 23,560 with a diminution of 43 points.

According to Krishna Appala of Capitalmind Research, the Budget provided long-awaited taxation relief, putting much wealth successful the hands of consumers.

Individuals earning implicit Rs 24 lakh annually volition present prevention an further Rs 1.1 lakh per year, portion those earning up to Rs 12 lakh per twelvemonth volition efficaciously wage nary income tax.

“With an estimated Rs 1 lakh crore expected to travel backmost into the system done these taxation cuts, the determination is apt to promote higher discretionary spending and savings,” said Appala.

Despite these taxation reductions, the authorities has kept its fiscal consolidation efforts intact, mounting the FY26 fiscal shortage people astatine 5.3 per cent of GDP, down from 5.8 per cent successful FY25.

Alongside the fiscal push, the RBI's determination to chopped the repo complaint by 25 bps to 6.25 per cent marks the opening of a imaginable rate-cut rhythm aft implicit 2 years of unchanged argumentation rates.

This follows a 50 bps CRR chopped successful December 2024 and a Rs 60,000 crore enslaved acquisition programme, each aimed astatine improving liquidity successful the banking system.

Hrishikesh Yedve of Asit C Mehta Investment Interrmediates Ltd (a Pantomath Group company) said that connected the play scale, scale has formed a greenish candle, confirming the bullish engulfing signifier formed past week.

“On the downside, contiguous enactment for the Bank Nifty is adjacent 49,650, portion connected the upside, 50,600 volition relation arsenic resistance. Traders should intimately show these levels for imaginable opportunities. However, looking astatine play formation, bargain connected dips strategy should beryllium adopted successful Bank Nifty,” helium mentioned.