India, June 6 -- Indian shares rallied on Friday as the Reserve Bank of India (RBI) surprised the market with a 50 basis points (bps) cut in the benchmark repo rate to 5.5 percent, slashed the cash reserve ratio (CRR) by 100 basis points to 3 percent, and also trimmed its inflation forecast for the year by 30 basis points to 3.7 percent.
The CRR cut alone is estimated to release Rs. 2.5 lakh crore into the financial system and boost economic growth.
RBI governor Sanjay Malhotra said the changes in growth-inflation dynamics call for not only continuing with the policy easing but also frontloading the rate cuts to support growth.
Traders also reacted positively to new reports that suggested the U.S. and China will resume trade talks in hop...