Stock Market Calls Bull Spread with Risk-on for RBI Policy Decision

Spread love

Sharp Dip in Volatility Lifts Stock Market above Key Technical Levels Ahead of RBI Meet

By S JHA

Mumbai, June 5, 2025 — Indian equity markets extended their gains for the second straight session on Wednesday, buoyed by strong buying in the pharma and realty sectors, as well as positive global cues. Investor optimism ahead of the Reserve Bank of India’s monetary policy announcement further lifted sentiment.

The Sensex surged 444 points to close at 81,442.04, while the Nifty 50 advanced 130.70 points, or 0.53%, to settle at 24,750.90. “The rally helped the Nifty reclaim key moving averages, with technical indicators pointing to strengthening momentum,” said Angel One in a post-market commentary to clients.

📈Pharma, Realty Lead Gains

Pharma stocks led the rally, driven by strong corporate developments. Top performers included Dr. Reddy’s Laboratories, Zydus Lifesciences, Glenmark Pharmaceuticals, and Reliance Industries. The Nifty Pharma index climbed over 1%, supported by improved investor confidence in healthcare-related earnings.

Real estate stocks also gained sharply, tracking improved sentiment on the back of a demand rebound and favourable interest rate expectations.

📊Midcaps, Smallcaps Outperform

The broader markets outshone the benchmarks, with the Nifty Midcap and Smallcap indices rising 0.58% and 0.98%, respectively. Angel One noted that the midcap segment continues to show strong momentum and could lead the market in the near term.

🔍Market Breadth & Volatility

Market breadth remained strong, with 64% of Nifty stocks and 59% of Nifty 500 stocks closing in the green. India VIX, a measure of market volatility, fell over 4%, marking its lowest close in 38 sessions, signalling easing concerns among traders.

“Technical indicators turned favourable, with the Nifty reclaiming its 10-day EMA after four sessions and the 20-day EMA after two. The Relative Strength Index (RSI) improved to 55, indicating a firming up of momentum,” said StockEdge in a commentary posted on its Telegram channel.

📉Global Impact & Derivatives Insight

While European markets traded mildly positive, Asian markets ended mixed. Derivatives data showed short covering in 24,600 and 24,650 call options, along with fresh put writing at 24,700, reflecting bullish positioning. The Nifty futures premium widened to 120, up from 100 a day earlier.

💸RBI Policy in Focus

Market participants are increasingly factoring in a possible 25 basis points rate cut by the RBI in its upcoming policy review, which has added to the optimism. The Indian Rupee also strengthened slightly, closing 11 paise higher at 85.79 against the US dollar.

🚀Stocks in Spotlight

Cochin Shipyard soared 12% to a 10-month high, with breakouts across timeframes and heavy volumes.
Zaggle Prepaid Ocean Services Ltd gained after acquiring Dice for ₹123 crore; the stock is up 35% in a month.
Firstcry jumped 9.5%, with trading volumes at 4x the weekly average, hitting a three-month high.
Hindustan Zinc rose over 5% in futures, with a 27% jump in open interest, signaling a strong long buildup.
Central Bank of India closed flat to mildly positive after announcing acquisition of a 24.9% stake in Future Generali India for ₹451 crore.

🔮 Outlook

According to Angel One, support for Nifty lies around the 24,600–24,500 zone, while resistance is seen near 24,800, with a potential upside towards 25,000 if buying sustains.

With the RBI policy decision just around the corner, all eyes are on the central bank’s stance amid easing inflation and global rate cut cues. For now, the mood on Dalal Street remains cautiously optimistic.

(Disclaimer: This article makes no recommendation for any kind of trades in the stock market)

Follow The Raisina Hills on WhatsApp, Instagram, <a href="https://www.y