Indian markets surged on Tuesday, with the Sensex and Nifty climbing over 1.5%. However, Wednesday’s opening is expected to be subdued as global markets face renewed pressure. Investors are focusing on the Reserve Bank of India’s (RBI) monetary policy decision, which will be announced later today.
Global Market Weakness Weighs on Sentiment
Global cues remain negative, with Asian markets opening sharply lower. The MSCI Asia ex-Japan index dropped 1%, while Japan’s Nikkei 225 slid 2.7%. Overnight, U.S. markets closed in the red as the government imposed new tariffs of up to 104% on Chinese imports, effective from midnight Wednesday. These tariffs have reignited fears of stagflation—rising prices coupled with slowing growth—across global economies.
RBI Policy in Focus
The RBI’s Monetary Policy Committee (MPC) concludes its meeting today, with an announcement expected at 10:00 AM IST. In February, the central bank reduced the repo rate by 25 basis points to 6.25% to boost economic growth. Since then, escalating global trade tensions have heightened expectations for further measures to support the Indian economy.
Market participants anticipate another rate cut and a potential shift in the RBI’s policy stance from “neutral” to “accommodative.” Such a move would signal greater support for economic growth in the future. Additionally, experts expect the RBI to address banking system liquidity to ensure smooth credit flow.
Ankita Pathak, macro strategist at Ionic Asset by Angel One, told Reuters, “India is better positioned than other Asian economies regarding U.S. tariffs; however, a global slowdown will still have ripple effects. The RBI needs to provide support.” Citi Research estimates that new U.S. tariffs could reduce India’s GDP by 0.06% and predicts three more repo rate cuts of 25 basis points each in 2025.
Technical Outlook and Trading Strategy
Despite Tuesday’s rally, the Nifty remains 14.2% below its all-time high from September 2024 due to weak corporate earnings, slower growth, foreign investor outflows, and global trade concerns.
Ajit Mishra of Religare Broking advised caution amid ongoing market volatility driven by trade tensions and the RBI’s policy decision. He recommended focusing on fundamentally strong stocks.
Shrikant Chouhan of Kotak Securities highlighted key levels for day traders:
- Nifty: Support at 22,330; resistance at 22,700–22,800
- Sensex: Support at 73,500; resistance at 75,000–75,200
If these levels break downward, further declines could test Nifty at 22,000 and Sensex at 72,800.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the Mumbai Samachar. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)