Friends today, foes tomorrow. The Musk-Trump bonhomie implodes. Here are the week’s top stories. The Reserve Bank of India has cut the repo rate, the interest rate at which the RBI lends to banks, by 50 basis points to 5.5%. The rate cut was higher than expectations of a 25 basis points reduction.
This is the third consecutive repo rate cut by the Monetary Policy Committee of the RBI. The MPC has also decided to lower the cash reserve ratio by 100 basis points from 4% to 3% in four equal tranches by November. RBI Governor Sanjay Malhotra said the move will release primary liquidity of about ₹2.5 lakh crore into the banking system.
Announcing the rate decisions, the RBI maintained its GDP growth forecast for the current financial year at 6.5%. However, it revised its retail inflation forecast to 3.7% from the earlier estimate of 4%. The higher-than-expected rate cut from the RBI boosted financial stocks, propelling the Nifty Bank index to lifetime highs.
Investors of realty stocks also cheered the CRR cut move. The rate cut also got a thumbs up from other segments of the stock market, with the Sensex and the Nifty gaining for the third straight session. Both benchmark indices ended higher for the week as well.
The big story from the auto sector, China has refused to ease rare earth export controls. In a press briefing on Thursday, a spokesperson for China’s Commerce Ministry said that its “move to strengthen export controls on rare-earth materials is in line with international practices.” Businesses across the world, especially in the auto sector, have raised concerns that China’s restrictions may lead to a potential halt in output. According to a Reuters report, Japan’s Suzuki has already suspended production of its Swift subcompact car due to the shortage. In India too, automakers have reportedly raised the same concerns with the government.
From Make in India woes to a Make in India win, India’s Tata Advanced Systems and France’s Dassault Aviation have joined hands to manufacture the Rafale fighter aircraft fuselage in India. Under this partnership, Tata Advanced Systems will set up a production facility in Hyderabad. The plant will manufacture key structural sections of the Rafale. The first fuselage sections are expected to roll off the assembly line in the financial year 2028.
And now the big global headline, friends turned foes, Elon Musk and Donald Trump are going for each other’s jugular. The world’s richest man, who quit the Trump administration just days ago, first hit out at the US President for his “Big Beautiful Bill.” Musk raised concerns over a likely surge in US national debt due to Trump’s plan. However, once Trump hit back and accused the Tesla CEO of opposing the plan because of the withdrawal of EV subsidies, Musk got personal. While Musk denied Trump’s claim, he alleged that the US President was on the Epstein list and also called for his impeachment.
That’s all the time we have on this week’s Business News Wrap. Log on to Hook.Online for our special story on India’s $130 billion sports makeover.
