The Reserve Bank of India (RBI) implemented an unexpected 50 basis points cut in the repo rate, which has stimulated a rally in the Indian stock market. This move boosted liquidity through a reduction in the cash reserve ratio (CRR), leading to a surge in the Sensex by 746 points and the Nifty reclaiming the 25,000 mark. Both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) turned net buyers on June 6, with net purchases of ₹1,009.71 crore and ₹9,342.48 crore respectively, reversing a four-month trend of FII selling. However, in June overall, Foreign Portfolio Investors (FPIs) withdrew ₹8,749 crore from Indian equities, influenced by renewed trade tensions between the U.S. and China and the relative attractiveness of U.S. bonds. Market analysts noted that the RBI’s rate cut is expected to support credit growth and keep interest rates softer, potentially flattening the bond yield curve over the medium term. Banking stocks, particularly HDFC Bank and IDFC First Bank, are seen as positioned for a potential bull run, although some caution remains regarding valuations in small and mid-cap segments. Meanwhile, global investors are retreating from U.S. equities amid trade and debt concerns, with Goldman Sachs data showing foreigners sold $44 billion in U.S. stocks over the past two months and net withdrawals reaching $31 billion year-to-date. There are growing worries about foreign investment risks in the U.S., including strategic real estate acquisitions by adversarial nations and litigation targeting U.S. tech companies, which some view as threats to national security and the country’s technological edge.