The Reserve Bank of India (RBI), in a surprise policy decision on June 6, 2025, announced a sharper-than-expected cut in the repo rate by 50 basis points , bringing it down to 5.5% , along with a 100bps reduction in the Cash Reserve Ratio (CRR) to be implemented in tranches. While the Monetary Policy Committee (MPC) retained its FY26 real GDP forecast at 6.5% , it revised the CPI inflation forecast downward to 3.7% from 4.0%. The stance was changed from "Accommodative" to "Neutral" , signaling a potential pause in the easing cycle. This policy shift, aimed at front-loading monetary stimulus amid slowing growth and a softer inflation outlook, has wide-ranging implications for India’s financial markets. Below is a sector-wise impact analysis: 1. Equity Markets: Short-Term Optimism with a Medium-Term Watch Positive Sentiment Triggered by Liquidity Easing The 50bps repo rate cut and CRR reduction are seen as stimulative for equities, particularly rate-sensitive s...