Closing Bell: Nifty Slips as RBI Raises Inflation Forecast and Cuts GDP Outlook, Dampening Rate Cut Hopes
5 Jun 2026 , 08:12 PM
The Indian benchmark indices ended marginally lower on June 5, 2026, with Nifty slipping to 23,366 and Sensex declining 116 points to close at 74,243, as the RBI’s monetary policy decision disappointed investors who were hoping for a more supportive stance. The central bank kept the repo rate unchanged at 5.25%, raised its FY27 inflation forecast to 5.1%, and trimmed its GDP growth projection to 6.6%, signalling a cautious outlook amid rising crude oil prices and global uncertainty. Nifty Bank bucked the trend with a 188-point gain, while Metal and IT stocks faced the sharpest selling pressure of the session.
Market Overview: Nifty, Sensex, and Bank Nifty Performance
Nifty 50 closed at 23,366.70 down 49.85 points (0.21%)
Sensex ended at 74,243.34, down 116.66 points (0.16%)
Nifty Bank settled at 54,496.25, up 188.40 points (0.35%)
Shares of Adani Enterprises surged 3%, record high after the Adani Group reported strong FY26 financial performance and reaffirmed its long-term growth and energy transition plans.
Record Capital Expenditure Announced: The Adani Group reported its highest-ever annual capex of ₹1.55 lakh crore in FY26, reflecting aggressive expansion across infrastructure, energy, and logistics businesses.
$100 Billion Energy Transition Commitment: The group reaffirmed plans to invest $100 billion over the next decade in renewable energy, green hydrogen, transmission, and other clean energy projects, boosting long-term growth expectations.
Record EBITDA and Cash Reserves: The group reported a record EBITDA of ₹94,834 crore and all-time high cash balances of ₹55,852 crore, highlighting strong operational performance and financial strength.
A block deal involving around 1.64 crore shares was executed, valued at nearly ₹4,790 crore. The transaction represented approximately 1.27% of the company’s equity and highlighted strong institutional participation in the stock
Shares of Bajaj Finance gained nearly 4% after positive regulatory developments and strong funding activity boosted investor confidence in the company and its housing finance subsidiary.
RBI Policy Relief Boosted Financial Stocks: Investor sentiment improved after the RBI maintained a supportive policy stance, benefiting lending and financial services companies by supporting credit growth and borrowing demand.
₹1,992 Crore Fundraising Strengthened Funding Base: Subsidiary Bajaj Housing Finance successfully raised ₹1,991.83 crore through a private placement of secured NCDs, strengthening its liquidity position and supporting future loan growth.
Lower-Cost Long-Term Funding Positive for Growth: The NCDs carry a coupon rate of 7.83% and mature in May 2029, providing stable medium-term funding for the company’s expanding housing finance operations.
Positive Sector-Wide Buying Supported the Stock: Renewed buying interest across banking, NBFC, and housing finance stocks following the RBI policy announcement further helped Bajaj Finance outperform the broader market.
Shares of Wipro fell more than 4% after the stock turned ex-date for its ₹15,000 crore share buyback, triggering profit booking and technical selling pressure.
Buyback Record Date Triggered Stock Adjustment: June 5 was the record date for Wipro’s ₹15,000 crore buyback, and investors needed to own shares by June 4 to be eligible. After the record date, the stock witnessed a normal price adjustment.
Arbitrage Traders Booked Profits: Many investors had accumulated shares to participate in the buyback at ₹250 per share, which offered a premium to the market price. Once eligibility was secured, traders exited positions, leading to selling pressure.
Reduced Buyback-Driven Demand: With the record date passing, the incentive for fresh buyback-related buying disappeared, resulting in lower demand and increased profit booking.
Large Buyback Programme in Focus: Wipro plans to repurchase up to 60 crore shares (around 5.7% of equity capital) through the tender route, with a total buyback size of ₹15,000 crore.
Shares of Trent traded sharply lower after turning ex-bonus for its 1:2 bonus issue, although the decline was largely a technical adjustment rather than a reflection of business weakness.
Stock Turned Ex-Bonus: Trent’s shares became ex-bonus for its 1:2 bonus issue, under which shareholders receive 1 additional share for every 2 shares held, leading to an automatic adjustment in the stock price.
Price Drop Was Mostly Technical: The apparent 33-34% decline in the share price was primarily due to the bonus adjustment and did not result in any loss of shareholder value, as investors received additional shares.
Minor Actual Selling Pressure: Excluding the bonus adjustment, the stock witnessed only a modest decline of around 2%, reflecting broader market caution and profit booking.
Long-Term Growth Outlook Remains Positive: Investors continue to remain optimistic about Trent’s growth prospects, supported by the aggressive expansion of its Zudio and Westside retail formats and strong long-term consumption trends.
Media (+3.48%) emerged as the top-performing sector as strong stock-specific buying and improving advertising revenue expectations boosted investor sentiment. Realty (+0.56%) and PSU Banks (+0.48%) traded higher as investors remained optimistic about domestic demand and welcomed RBI measures aimed at supporting liquidity and attracting foreign inflows. However, Metal (-1.60%) was the worst-performing sector after the RBI raised its inflation forecast and lowered GDP growth projections, raising concerns about future industrial demand and commodity consumption. IT (-0.99%) remained under pressure due to profit booking following the recent AI-driven rally, weakness in select technology stocks such as Wipro after its buyback record date, and cautious sentiment around global technology spending. Oil & Gas (-0.48%) also traded lower as elevated crude oil prices continued to create uncertainty around inflation, energy costs, and overall market sentiment despite the RBI’s supportive measures for the rupee.
Main Reasons for Stock Market down Today
RBI Raised Inflation Forecast and Cut GDP Growth Outlook
The RBI increased its FY27 inflation projection to 5.1% from 4.6% and lowered its GDP growth forecast to 6.6% from 6.9%. The combination of higher inflation and slower growth raised concerns about corporate earnings and the broader economic outlook, leading to cautious investor sentiment. Read details on the RBI monetary Meeting here.
RBI Maintained a Neutral Stance, Disappointing Dovish Expectations
Although the RBI kept the repo rate unchanged at 5.25%, it maintained a neutral policy stance and highlighted significant risks to both inflation and growth. Investors who were expecting a more supportive or dovish policy tone turned cautious, resulting in profit booking across sectors.
Rising Crude Oil Prices Continued to Fuel Inflation Concerns
Elevated crude oil prices remained a major concern for markets. Higher energy prices increase transportation and manufacturing costs, worsen inflationary pressures, and can negatively impact India’s import bill and corporate profit margins.
FII Outflows and Weak Global Market Sentiment Weighed on Equities
Persistent foreign fund outflows, weakness across broader Asian markets, and ongoing geopolitical tensions in the Middle East continued to pressure investor sentiment. Concerns surrounding the US-Iran conflict and global uncertainty kept risk appetite subdued despite some recovery in the rupee.
Summary-
June 5, 2026, reflected a cautious trading session in the Indian stock market as investors assessed the RBI’s policy outlook, rising inflation risks, and slowing growth expectations.
• Media, Realty, and PSU Bank stocks outperformed as investors responded positively to RBI measures aimed at supporting liquidity, attracting foreign inflows, and strengthening the rupee.
• Metal, IT, and Oil & Gas sectors remained under pressure due to concerns over weaker economic growth, elevated crude oil prices, profit booking in technology stocks, and uncertainty surrounding global demand.
With Nifty 50 falling 49.85 points (-0.21%) to 23,366.70, Sensex declining 116.66 points (-0.16%) to 74,243.34, and Bank Nifty rising 188.40 points (+0.35%) to 54,496.25, investor sentiment remained cautious after the RBI raised its FY27 inflation forecast to 5.1%, lowered GDP growth projections to 6.6%, maintained a neutral policy stance, and highlighted risks from rising crude oil prices, FII outflows, and ongoing geopolitical tensions in the Middle East.
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