Geopolitical concerns and anticipation ahead of the RBI’s Monetary Policy Committee (MPC) meeting rattled investor sentiment and led Indian equity markets to open on a subdued note on Tuesday.
The BSE Sensex dropped 199 points or 0.25 per cent to 80,819 in early trade, while the NSE Nifty declined 44.05 points or 0.18 per cent to 24,678.70 as of 9:30 AM.
Market analysts pointed to a combination of external and domestic factors that are weighing on investor confidence.
Foremost among these was a recent statement by US President Donald Trump, who threatened to raise tariffs on India over its continued oil imports from Russia.
This development has injected fresh uncertainty into trade and diplomatic relations, with potential implications for India’s exports.
Among the key sectoral indices, Nifty FMCG was the biggest loser, falling by 0.55 per cent. Nifty Bank slipped 0.12 per cent, and the Nifty IT index edged down 0.25 per cent.
In contrast, Nifty Smallcap 100 bucked the trend with a marginal gain of 0.19 per cent, while Nifty Midcap 100 eased 0.17 per cent.
Vikram Kasat, Head of Advisory at PL Capital, noted, “On the technical front, Nifty breaking above 24,956 could reverse the short-term downtrend. Until then, bears maintain the upper hand.”
Kasat added that support zones lie at 24,550 and 24,442, with resistance seen at 24,900 and 25,000.
If the Nifty remains above the 24,600 level, a bounce towards the resistance zones could be on the cards.
RBI Policy Expectations
The RBI will announce its latest stance on interest rates at the monetary policy meeting, which investors are closely monitoring.
Analysts remain cautiously optimistic, with some anticipating a 25 basis point rate cut, which could provide a short-term boost to market sentiment.
Meanwhile, experts suggest that investors adopt a cautious stance. “Some money can be moved to fixed income until there’s more clarity,” advised one market strategist.
Within the Nifty pack, Coal India, Maruti Suzuki, SBI, and Dr Reddy’s Laboratories emerged as top gainers.
On the losing side, HDFC Bank, Reliance Industries, HUL, ICICI Bank, and Tata Consumer Products saw notable declines.
Overnight, US markets posted strong gains, with the Dow Jones up 1.34 per cent, the Nasdaq Composite rising 1.95 per cent, and the S&P 500 advancing 1.47 per cent.
The rally was driven by growing confidence that the US Federal Reserve will cut interest rates in September, with odds now exceeding 90 per cent.
Asian markets followed suit with a positive tone: Kospi 200 surged 1.09 per cent, Shanghai Composite rose 0.52 per cent, Nikkei 225 climbed 0.63 per cent, and Hang Seng Index edged up 0.14 per cent.
On Monday, foreign portfolio investors (FPIs) offloaded equities worth ₹2,566 crore, while domestic institutional investors (DIIs) net purchased shares worth ₹4,386 crore — a sign of sustained domestic interest despite external headwinds.
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