Nifty, Sensex open flat ahead of RBI policy announcement, US-Russia talks on investors radar

MUMBAI: Indian stock markets opened flat on Wednesday amid a mix of domestic and global uncertainties, with investors opting for a cautious approach ahead of the Reserve Bank of India’s monetary policy announcement and key geopolitical developments, including a critical US-Russia meeting.

The mood remained subdued as market participants awaited clarity on multiple fronts.

The NIFTY 50 index opened at 24,641.35, registering a marginal decline of 8.20 points or 0.03 per cent. Similarly, the BSE Sensex opened slightly lower at 80,694.98, slipping by 15.27 points or 0.02 per cent.

Market experts noted that the prevailing uncertainty, driven by monetary policy expectations and geopolitical tensions, has pushed investors into a wait-and-watch mode.

Ajay Bagga, a banking and market expert, told ANI, “Trump tariffs are complicating the RBI’s task. At the last policy, with the jumbo cut and the shift of policy stance to ‘Neutral’, RBI had signalled rate cuts were done for a few quarters at least. Persistently low consumer inflation and a deflationary spiral in wholesale/producer price inflation globally has created space for one more rate cut from the RBI today.”

Bagga further noted the significance of ongoing US-Russia developments.

“Indian markets are watching the US-Russia talks today for further cues. Trump yesterday said in an interview with a business channel that he was looking to announce substantial secondary tariffs on India in the next 24 hours. He also spoke of tariffs on semiconductors/chips and pharma imports in the next week or so. However, by the end of the day, he was denying that he ever gave a number of 100 per cent secondary tariffs on countries buying Russian crude oil. With Trump emissary Witkoff visiting Moscow today for ceasefire talks, markets are on a wait and watch mode,” he added.

If the RBI proceeds with a rate cut today, it is expected to bring down the benchmark rate to 5.25 per cent. This could signal the end of the current rate cut cycle, or leave room for one final cut in December, depending on the macroeconomic performance.

Historically, the repo rate stood at 5.15 per cent pre-COVID, was reduced to 4 per cent during the pandemic, and later increased to 6.5 per cent to combat inflation.

“As the rate cut cycle enters its last phase, RBI may cut today and then go into a pause mode to allow the transmission to happen,” Bagga remarked.
Meanwhile, market movement across NSE’s broader indices reflected a mixed sentiment. The Nifty 100 opened flat, Nifty Midcap 100 gained 0.21 per cent, while the Nifty Smallcap 100 edged up by 0.03 per cent.

Among sectoral indices on NSE, buying was seen in Nifty Auto, Media, Metal, and PSU Bank stocks. However, Nifty IT was down by 0.22 per cent, while Nifty FMCG, Nifty Pharma, and Nifty Private Bank remained in the red.

Adding to investor nervousness is the looming Friday deadline for a potential Russia-Ukraine ceasefire. Market participants are expected to closely monitor developments on this front, which could influence near-term sentiment.

From a technical standpoint, SBI Securities noted, “Technical indicators and oscillators are currently pointing to a sideways-to-bearish bias in the market. Going ahead, the zone of 24,550-24,500 will act as important support for the index. Any sustainable move below the 24,500 level will lead to further selling pressure. In that case, the index is likely to test the 24,350 level. While on the upside, the zone of 24,770-24,800 will act as an important hurdle for the index.”

On the earnings front, several major companies are slated to release their quarterly results today. These include Bajaj Auto, Trent, Divi’s Laboratories, Bajaj Holdings & Investment, Pidilite Industries, Power Finance Corporation, Hero MotoCorp, Bharat Heavy Electricals, Fortis Healthcare, UNO Minda, Jindal Stainless, and Bharat Forge.

In other Asian markets also trading remained mixed. Japan’s Nikkei 225 was the only index in the green, rising by 0.58 per cent. Other indices were under pressure at the time of reporting, Singapore’s Straits Times fell by 0.08 per cent, Hong Kong’s Hang Seng dipped by 0.24 per cent, Taiwan Weighted index declined by 0.55 per cent, and South Korea’s KOSPI dropped by 0.23 per cent. (ANI)