RBI Rate Cut Buzz: Markets Hold Their Breath Ahead of Crucial MPC Decision

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India’s telecom giants, Reliance Jio and Bharti Airtel, are raising concerns over the proposed 4% annual revenue fee for satellite internet players like Elon Musk’s Starlink. Represented by the Cellular Operators Association of India, they argue the policy unfairly benefits newcomers while traditional telcos pay 21% more due to costly spectrum auctions. Despite recent Starlink distribution partnerships, both firms after investing nearly $20B in 5G fear losing their edge in an uneven regulatory landscape.

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Today’s Market Menu

▪️ Impact News

▪️ Markets

▪️ Everything else you need to know today

▪️ Mindset

▪️ Stock Screener to up your game

IMPACT NEWS

Rate Cut or Hold? RBI’s Balancing act ahead of Market Showdown

As the RBI’s Monetary Policy Committee gears up for its decision this Friday, markets are bracing for a potential inflection point. A 25 bps rate cut is on the table, fueled by softening inflation and sluggish credit growth both of which support monetary easing. Yet, a narrowing interest rate gap with the U.S. looms large, raising fears of capital outflows just as global investors tread cautiously.

This isn’t just about policy it’s about positioning. A rate cut could be the catalyst for momentum across key sectors: banking stocks may rally on improved lending margins, real estate could benefit from lower home loan rates, and auto demand might accelerate further. On the flip side, a pause would signal caution amid volatile global cues and uncertain FPI behavior.

The decision isn’t easy. With ₹20 lakh crore wiped off markets in recent sessions, investor sentiment is fragile. The RBI must walk a tightrope between stimulating domestic demand and maintaining macroeconomic stability.

Will Friday’s announcement be the trigger for a market rebound or another moment of restraint in uncertain times? All eyes are on the central bank.

MARKETS

The Indian stock market showed strong optimism, with key indices closing in the green. The Sensex surged 443 points to 81,442 (+0.55%), while the Nifty 50 jumped 130 points to 24,750 (+0.53%). Nifty Midcap 100 led the rally with a 0.65% gain, and Nifty Bank edged up 84 points. Investors seem to be betting big ahead of the RBI’s policy meeting, signaling growing confidence in a potential rate cut or supportive stance from the central bank.
_{Closing figures as on 05.06.25 (3.30pm IST)}

🔎 In Focus

Stock Performance:

Top Gainers

✅ Eternal +4.43% Surged on buzz around potential strategic partnership talks and increased retail participation; strong volume (127M) added fuel.
✅ Dr Reddy’s Labs +3.09% Gained on positive sectoral momentum in pharma stocks and expectations of robust Q1 FY26 earnings. Supportive global sentiment also helped.
✅ Trent Ltd +3.02% Continued its record-breaking rally amid strong fashion retail demand and expansion optimism. Analysts remain bullish post strong FY25 earnings.
✅ Power Grid Corp +1.98% Rose on hopes of RBI rate cut, which benefits capital-intensive infra players. Also backed by defensive buying in uncertain market moods.

Top Losers

🔻 IndusInd Bank -1.37% Declined on concerns around asset quality and FII outflows ahead of RBI's policy decision. Traders booked profits after a recent uptick.
🔻 Tata Consumer Products -1.11% Dipped as profit booking hit FMCG names after a steady climb. No fresh triggers; investors rotated into cyclical plays.
🔻 Axis Bank -1.02% Slid due to cautious stance ahead of monetary policy, with traders wary of banking sector volatility and valuations.
🔻 Bajaj Finserv -0.62% Faced minor correction as rate-sensitive stocks remained rangebound, investors may be waiting for RBI signals before taking fresh positions.

INDIA FRONTIER

Everything else you need to know today

✍🏻 RBI’s Big Day Will Rates Hold Steady?: As the RBI’s policy meeting kicks off, markets are on edge. With inflation stabilizing and growth holding, experts predict the central bank may stay the course but will a surprise pivot spark a rally or rattle nerves? Investors, buckle up.

⚡ Ola Electric’s Stock Slide Sparks Emergency Collateral Boost: Facing a sharp dip in share value, Ola Electric’s founder Bhavish Aggarwal rushed to top up loan collateral a high-stakes move that underscores the volatility surrounding India’s EV unicorn ahead of its much-anticipated IPO.

🚘 Rare Earth Shock: Suzuki’s Swift Hit by China Curbs: Suzuki Motor has halted production of its iconic Swift model after China tightened rare earth exports. This isn’t just a supply chain hiccup it’s a red flag for automakers globally relying on China’s tech-critical materials.

📈 SEBI Eyes Simpler Route for India’s Elite Investors: SEBI is mulling a smoother onboarding process for accredited investors, aiming to deepen India’s capital pool. If successful, this move could unlock a new wave of high-net-worth market participation and private investment access.

THE HANOOMAAN INSTITUTE

How Many Stocks Should You Own? Buffett’s Answer Might Surprise You

Wall Street says “diversify.”
Warren Buffett says: Only if you don’t know what you’re doing.

The Oracle of Omaha believes concentration beats over-diversification and that real wealth is built on high-conviction bets, not a laundry list of lukewarm picks. Here’s how Buffett and Charlie Munger have redefined portfolio wisdom:

🔹 “Diversification is protection against ignorance”: Too many stocks? It’s often a sign you don’t truly understand any of them deeply.

🔹 Fewer, better bets = stronger results: Buffett backs his best ideas like Coca-Cola and Apple not his 27th-best.

🔹 Historical sweet spot: 5–20 holdings Buffett’s early portfolios were concentrated with 5–6 major positions.

🔹 Munger’s blunt truth: Owning 40+ stocks? He calls it “absolute insanity.”

🔹 Ideal for skilled investors: 6–10 strong, researched, cross-sector businesses may be enough.

🔹 Active investors’ sweet spot: 20–25 stocks: Data shows you gain ~95% of diversification benefits without watering down your winners.

🔹 Prefer passive? Follow Buffett’s 90/10 rule: 90% S&P 500 index fund + 10% short-term bonds.

🔹 Buffett’s personal portfolio? Almost all Berkshire: He doesn’t just preach conviction he lives it.

💡 Buffett’s bottom line:
Three great businesses will make you richer than fifty average ones.

SUPERCHARGE YOUR INVESTING SKILLS

STOCK SCREENER TO UP YOUR GAME

Good fcf yield and growth
by Jindal Naveen

Market Capitalization > 100 AND
Sales growth 3Years > 20 AND
Profit growth 3Years > 20 AND
Price to Free Cash Flow <5 AND
Price to Free Cash Flow > 0 AND
Price to Earning < (Sales growth 3Years - 5)

Thanks for reading.

Until tomorrow!

Hanoomaan India Business team

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