The Indian stock market opened cautiously today ahead of the Reserve Bank of India’s (RBI) key monetary policy announcement scheduled for Friday. The BSE Sensex inched up by 121.16 points, starting the day at 78,179.31, while the NSE Nifty gained 34.70 points, beginning at 23,638.05.
Of the Nifty 50 companies, 28 stocks advanced, 22 declined, and one remained unchanged in early trade. Bharti Airtel, Britannia, Hero MotoCorp, Tata Steel, and JSW Steel emerged as the top gainers.
On the other hand, Power Grid, HDFC Life, SBI, TCS, and ITC recorded losses.
Ajay Bagga, a noted market and banking expert, observed that investors have largely factored in a 25-basis-point rate cut by the RBI.
“Inflation is expected to average 4.5 per cent in Q4 FY25, slightly lower than the 4.85 per cent for the entire financial year 2024-25. Looking ahead, inflation is projected to hover between 4.2 per cent and 4.5 per cent next year,” he said.
Bagga added, “Globally, the economic growth is expected to be strong in the range of 3 per cent to 3.25 per cent. The Bank of Canada, Bank of England and ECB have all cut rates over the last week while the US Fed stood pat. The Bank of Japan has raised rates and has given indications of further raising rates to 1 per cent over the next two quarters. Add to this the overlay of Trump Tariffs, which inject the uncertainty of protectionism, inflation and sharp currency moves.”
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He further noted, “This raises the chance that the RBI could pause for now and wait for the initial months of Trump 2.0 to pass. We feel RBI will seize the chance to cut today, will provide more liquidity to the money markets and will keep its inflation and GDP growth targets in line with the recent Union Budget and Economic Survey.”
Meanwhile, Akshay Chinchalkar, Head of Research at Axis Securities, highlighted the importance of Nifty’s technical setup.
“The Nifty’s drop yesterday pushed it back below the falling trendline it broke above two days ago, so this lack of upside follow-through shows resistance at higher levels. 23,807 – 23,823 represents a key upside hurdle, while 23,480 – 23,513 matters on the downside,” he explained.
He added, “A break of either zone will determine the next tactical trend, which may be triggered by the RBI’s rate decision today – the market will be watching the commentary from the MPC more closely given that a 25 bps rate cut is already well priced-in.”
As market expectations have largely priced in a 25-basis-point rate cut, investors are likely to focus on the RBI’s guidance regarding inflation, liquidity measures, and the future interest rate trajectory.
Analysts believe that a dovish stance could uplift market sentiment, while a cautious approach may keep equities range-bound.
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