Indian Markets Anticipate RBI Monetary Policy Amid Rate Cut Speculation

The Indian stock market opened cautiously ahead of the RBI's monetary policy announcement. While the market expectations lean towards a 25-basis-point rate cut, investor attention remains on RBI's inflation guidance. Top gainers included Bharti Airtel and Tata Steel, while Power Grid and TCS saw declines.

The Indian stock market started the session on a cautious note as investors await the Reserve Bank of India's (RBI) crucial monetary policy announcement on Friday. The BSE Sensex rose by 121.16 points to begin at 78,179.31, and the NSE Nifty advanced by 34.70 points, opening at 23,638.05.

In early trade among the Nifty 50 companies, 28 stocks advanced, while 22 declined. Bharti Airtel, Britannia, Hero MotoCorp, Tata Steel, and JSW Steel topped the gainers' list, whereas Power Grid, HDFC Life, SBI, TCS, and ITC emerged as the losers. Ajay Bagga, a market expert, indicated that investors largely expect a 25-basis-point rate cut by the RBI, with inflation projected to average 4.5% in Q4 FY25, slightly below the 4.85% for 2024-25.

Globally, economic growth is expected between 3% and 3.25%. A mix of recent global rate changes and potential U.S. protectionism through Trump-era tariffs creates uncertainty. The RBI may pause and wait for the effects of the current geopolitical climate but is likely to cut rates to align with the Union Budget.

Akshay Chinchalkar, from Axis Securities, highlighted the Nifty's technical dynamics. Following a drop, Nifty faces resistance at 23,807-23,823 and support at 23,480-23,513. The RBI rate decision and its ramifications will be closely monitored as a 25-bps cut is already anticipated in market valuations.

With expectations for a 25-bps rate cut priced in, the RBI's commentary on inflation, liquidity, and future rate direction remains crucial. A dovish outlook could uplift market sentiment, while a conservative approach might keep shares within a range. (ANI)