Liquidity Boost for the Markets ?

Markets Overview

So many things happened this week. The first major development was a shift in focus for President Trump—from targeting other countries to taking on individuals. A notable fallout occurred between him and Elon Musk, and that spat began dominating the media narrative, overtaking the tariff war story. Interestingly, the global markets seem to be gradually adjusting to the volatility of Trump’s statements, no longer reacting sharply to every tweet or comment. This change is slowly getting priced in as the market matures around such political noise.

The second and perhaps more impactful event was the surprise 50 basis point rate cut by the Reserve Bank of India (RBI). This brings the total rate cut to 100 basis points in recent meetings, double what the market expected this time. This move indicates two things: first, that inflation appears to be well under control, giving the RBI confidence to ease further; and second, a subtle hint that the economic data may not be as strong as it seems on the surface, prompting the RBI to offer more stimulus.

Whether you see this as a defensive or opportunistic move depends on your lens. Personally, I see this as a proactive step to push growth, especially now that the geopolitical backdrop is stabilizing. The markets, of course, love rate cuts—especially unexpected ones. That’s why we saw rate-sensitive sectors like real estate, NBFCs, and banks rally strongly following the announcement.

Latest Daily Byte

We had a fantastic day in the markets today, thanks to a surprising and bold move by the Reserve Bank of India. The RBI announced a 50 basis points rate cut, whereas most of the market participants were expecting a more modest 25 basis points reduction. This unexpected move lifted the mood significantly, especially for interest rate-sensitive stocks, which saw a noticeable uptick.

Rebalance Update for the week