The Indian stock market is set to experience a downward trend as both the Sensex and Nifty 50 indices are expected to open lower on Wednesday. This decline comes in response to negative signals from global markets. Recent trading in Asia showed a drop, alongside a significant fall in US markets triggered by the White House’s implementation of extensive tariffs, including a staggering 104% tax on China. This scenario has left investors feeling uneasy about the future.
Anticipated RBI Monetary Policy Changes
Today marks a crucial day for the Reserve Bank of India (RBI) as it prepares to unveil its first monetary policy for FY26. Under the leadership of Governor Sanjay Malhotra, it’s widely expected that the Monetary Policy Committee (MPC) will announce a cut in the repo rate due to easing inflation and a slowdown in economic growth.
- Possible repo rate cut to 6%
- Focus on economic stabilization
On Tuesday, Indian markets rebounded sharply after a significant previous slump. Both benchmark indices surged by 1.5%, with the Sensex climbing 1,089.18 points to close at 74,227.08 and the Nifty 50 gaining 374.25 points to finish at 22,535.85.
Global Market Influences on Indian Indices
“Global cues were favorable, leading to a remarkable recovery for our local benchmarks. The fears surrounding US tariffs have slightly eased, creating optimism that nations will find solutions to navigate these challenges. Given India’s consumption-driven economy, the impact of US tariffs is expected to be less severe compared to other countries,” explained Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd.
Asian Markets Take a Hit
Asian stock markets opened lower on Wednesday as the tariffs set by President Donald Trump loom large, including the notable 104% tariff on Chinese goods.
- Japan’s Nikkei 225 fell by 3.14%
- Topix experienced a 3.26% decline
- South Korea’s Kospi dipped by 0.18%
- Hong Kong’s Hang Seng index futures are indicating a weak start
Wall Street’s Impact on Global Sentiment
On Tuesday, the US stock market also experienced a downturn, reversing what initially appeared to be a strong rally. The S&P 500 fell below 5,000 points for the first time in nearly a year, resulting in a staggering loss of $5.83 trillion in market value over just four days.
- Dow Jones Industrial Average dropped by 320.01 points (0.84%) to close at 37,645.59
- S&P 500 fell by 79.48 points (1.57%) to settle at 4,982.77
- Nasdaq Composite decreased by 335.35 points (2.15%) to end at 15,267.91
Notably, major tech stocks like Tesla and Nvidia also faced declines, with Tesla down 4.90% and Nvidia down 1.37%.
Future Outlook on Tariffs and Oil Prices
Additionally, President Trump hinted at a forthcoming “major” tariff on pharmaceutical imports, aiming to encourage drug companies to relocate their operations to the US.
In the energy sector, crude oil prices have seen a significant decline, reaching a four-year low. The ongoing trade war impacts global demand, with Brent crude dropping 2.90% to $61.00 a barrel and West Texas Intermediate (WTI) falling 3.44% to $57.53.
As markets around the world react to these developments, investors are urged to stay informed and prepared for potential volatility.
