Markets Braced for RBI Rate Verdict, US Inflation Data & Tariff Impact: Analysts
Stock markets are gearing up for a turbulent week as multiple pivotal events approach. Experts forecast volatility driven by the Reserve Bank of India’s (RBI) forthcoming interest rate verdict and the unveiling of US inflation figures. The unease is heightened by apprehensions over how US tariffs will reverberate through the global economy and affect inflation.
Analysts express growing alarm over the possibility of an escalating trade war, which could derail international commerce and economic expansion. The recent tariffs introduced by US President Donald Trump have jolted markets worldwide, raising the specter of a global recession.
In India, trading will halt on Thursday for “Shri Mahavir Jayanti,” offering a brief pause amid the storm. Puneet Singhania, Director at Master Trust Group, highlights that the imminent US inflation data and Federal Open Market Committee (FOMC) minutes will be under intense scrutiny. “Global and Indian markets are in for a bumpy ride this week,” he cautions.
On the home front, the RBI’s interest rate call is a major focus, with speculation of a 25 basis points reduction. India’s industrial and manufacturing production figures, due this week, will also shed light on domestic economic vitality.
Across the globe, the mood is grim. US stock markets cratered nearly 6% on Friday, capping their bleakest week since 2020. China’s March Consumer Price Index (CPI) data drops Thursday, followed by UK GDP figures on Friday, both poised to sway market directions, Singhania notes.
Also read: Indian Markets Slide as US Reciprocal Tariffs Loom: Impact on Investors
Last week, India’s BSE Sensex plummeted 2,050.23 points (2.64%), and the NSE Nifty shed 614.8 points (2.61%), mirroring a worldwide sell-off fueled by trade war jitters.
Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services, predicts choppy waters for Indian markets due to US reciprocal tariffs and the threat of additional sector-specific levies. “Attention will zero in on the RBI’s April 9 policy outcome and the Q4 FY25 earnings kickoff with TCS results on April 10,” he says.
March CPI data from the US and India will also command investor focus, Khemka adds. Meanwhile, experts stress that foreign investor moves, the rupee-dollar exchange rate, and crude oil prices will be critical market influencers this week.
Also read: Donald Trump Defends Tariffs On Chinese Goods, US Tariffs On Chinese Imports Now 54%
Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, warns, “Trump’s reciprocal tariff strategy could spark a recession and inflate prices in the US, with ripple effects hitting other major economies.”
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, observes a shift in foreign portfolio investor (FPI) activity: “FPIs flipped from buyers in March to sellers in early April after Trump’s April 2 tariff reveal.” He notes the tariffs—10% on all imports, 25% on automobiles, and steep reciprocal rates—exceeded expectations, stoking inflation fears and even whispers of US stagflation. This triggered a brutal sell-off, with the S&P 500 and Nasdaq shedding over 10% in two days.
In sum, this week promises to test investor resilience as economic data drops and geopolitical friction intensify, setting the stage for a volatile market showdown.
(PTI)