Stock markets experience a decline as the Reserve Bank of India's MPC maintains the repo rate at 5.50%, with the Nifty falling below 24,600 and the Sensex decreasing by 100 points.
In the early trading hours, Indian equity indices opened muted, with the NSE Nifty 50 opening flat at 24,645 and the BSE Sensex opening 40 points higher at 80,750. The Nifty Midcap rose 98 points to 57,305, while the Bank Nifty opened flat at 55,363.
Key laggards in the Nifty 50 included Bharti Airtel, which experienced a slow start in the morning trade. The RBI MPC meet, scheduled for 10 AM today, is a hot topic, with market analysts closely watching for cues on the repo rate, inflation, and growth.
In a recent development, the RBI Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 5.5%, continuing a neutral policy stance. This decision was influenced by several factors, including moderating inflation, stable growth, and external uncertainties. The RBI lowered the inflation forecast for fiscal year 2026 to 3.1%, citing favorable base effects, good monsoon, Kharif sowing, and sufficient buffer stocks. However, core inflation remained stable around 4%, and a slight uptick in inflation was expected in the last quarter of the year.
The MPC also acknowledged the ongoing transmission of prior monetary easing measures, with 100 basis points of rate cuts implemented since February 2025 still unfolding in the economy. Despite risks from global trade tensions, particularly US tariffs on Indian exports, the MPC saw this as an opportunity for India to enhance its integration into global supply chains and improve export competitiveness, especially in labor-intensive sectors.
In the global arena, U.S. President Donald Trump plans to announce fresh tariffs on semiconductors within the next week or so. Trump also hinted at a massive push on pharmaceutical imports, with potential tariffs as high as 250%. These developments, along with Trump's comments on India being an unfavourable trade partner, could potentially have a negative impact on the Indian market.
On the domestic front, Shrikant Chouhan, Head Equity Research at Kotak Securities, believes the market is exhibiting directionless activity. Prashanth Tapse, Senior Vice President of Research at Mehta Equities, suspects a pause in rate cuts.
Meanwhile, the shares of NSDL soared 3% after listing at a 10% premium to the issue price, while CDSL fell 2% for reasons not specified. ICICI Bank and Larsen & Toubro were also among the major movers in the morning trade.
As the day progresses, the market will continue to navigate these global and domestic challenges, with the RBI MPC meeting providing valuable insights into the future direction of monetary policy.
- Traders and analysts are closely observing the RBI MPC meeting, hoping to gain cues about the repo rate, inflation, and growth, which could influence their investment decisions in the DEFI market.
- Despite the neutral policy stance maintained by the RBI MPC, analysts expect a slight uptick in inflation in the last quarter of the year, potentially affecting stock trading and personal-finance portfolios.
- In the Indian equity market, the Nifty 50 opened flat, with Bharti Airtel being a key laggard, while the Nifty Midcap and Bank Nifty experienced some growth.
- The global economy, particularly the US market, could be impacted by fresh tariffs on semiconductors and pharmaceuticals, as announced by President Donald Trump, which could affect the Indian market due to trade tensions.
- In an effort to improve export competitiveness, the RBI MPC sees the potential risks from global trade tensions as an opportunity for India to increase its integration into global supply chains, focusing on labor-intensive sectors.
- As the economy continues to navigate domestic and global challenges, investors and businesses must carefully observe the market's direction with the RBI MPC meeting shedding light on the future course of monetary policy.
