Tuesday’s session saw significant increases for the Sensex and Nifty, but today’s beginning is anticipated to be impacted by a worldwide sell-off and concerns about trade tensions.
Although markets saw strong gains on Tuesday, jumping more than 1.5 percent, Dalal Street is probably going to open lower on Wednesday as pressure on global markets returns.
Tuesday’s session saw significant increases for the Sensex and Nifty, but today’s beginning is anticipated to be impacted by a worldwide sell-off and concerns about trade tensions. The Reserve Bank of India (RBI), which is scheduled to make its policy announcement this morning, is currently the center of attention.
The Nifty50 likely open lower than its last close of 22,535.85, as indicated by the Gift Nifty futures, which were trading at 22,445.50 at 7:43 am.
These are the stocks that will be the main focus of trade on Wednesday.
Dalal Street is under additional strain due to weak indications from international markets. Markets in other Asian countries opened far lower. Japan’s Nikkei 225 index lost 2.7%, while the MSCI Asia ex-Japan index dipped 1%.
US markets also experienced a significant decline overnight. Just after midnight on Wednesday, the US administration announced that new tariffs of up to 104% on Chinese imports would go into effect, and Wall Street closed the day lower. additional concerns about stagflation—a combination of rising prices and sluggish growth in international markets—have been sparked by these additional charges.
RBI POLICY IN FOCUS
The result of the RBI’s Monetary Policy Committee (MPC) meeting, which concludes today, is the primary focus of investors. In an effort to boost growth, the central bank lowered the repo rate by 25 basis points, to 6.25%, during its most recent meeting on February 7. Since then, tensions over international trade have gotten worse, raising hopes that the RBI may announce additional measures to boost the Indian economy.
At 10:00 am, the RBI is anticipated to make its announcement. Many in the market have already anticipated a rate drop. According to some analysts, the central bank may also shift from a “neutral” to a “accommodative” policy position, which would result in future economic support.
In order for credit to flow freely to families and businesses, several brokerages also anticipate that the RBI will take action to maintain excess liquidity in the banking sector.
“Even though India is in a better position than other Asian nations with regard to US tariffs, the repercussions of a global slowdown will still affect us,” Ankita Pathak, macro strategist and global equities fund advisor at Ionic Asset by Angel One, told Reuters. The RBI must provide assistance.
According to Citi Research, India’s GDP would drop by 0.06% as a result of the new US tariffs. Beginning with today’s meeting, it anticipates three additional 25 basis point repo rate reduction in 2025 to help the faltering domestic economy.
TECHNICAL VIEW AND MARKET STRATEGY
Even after Tuesday’s increases, the Nifty is still 14.2% behind its peak on September 27, 2024. Weak company results, slowing growth, foreign investor selling, and concerns about global trade challenges have all contributed to this decline.
The senior vice president of research at Religare Broking Ltd., Ajit Mishra, advised traders not to place too much emphasis on Tuesday’s rebound. The markets are anticipated to remain turbulent due to trade concerns. The RBI’s policy choice may potentially result in abrupt changes. It is recommended to take a cautious approach and concentrate on strong stocks.
Kotak Securities’ Head of Equity Research, Shrikant Chouhan, offered his opinions on critical levels for day traders.
The Nifty’s 22,330 and the Sensex’s 73,500 are crucial marks for day traders. The market might recover to 22,700 or possibly 22,800 on the Nifty and to 75,000 or 75,200 on the Sensex if current levels hold. But more selling might occur if the index drops below 22,330 or 73,500. In that scenario, the market would test lower levels of roughly 73,000–72,800 on the Sensex and 22,110–22,000 on the Nifty.
