Indian stock markets opened on a cautious note Friday morning, as investors awaited the RBI Policy Decision, expected to provide direction for the economy in the coming months. Both benchmark indices showed minimal movement at the open, reflecting the uncertainty surrounding the central bank’s stance.
As of 9:15 a.m. IST, the Nifty 50 edged down slightly by 0.01% to 24,748.7, while the BSE Sensex mirrored the decline, also slipping 0.01% to 81,434.24. The muted performance came as traders refrained from making large bets ahead of the RBI Policy Decision, scheduled for 10:00 a.m. IST.
Despite the subdued overall indices, investor sentiment remained moderately positive across sectors. Nine out of the 13 major sectoral indices registered early gains, suggesting underlying optimism. Notably, broader indices such as the small-cap and mid-cap segments, typically more focused on domestic growth, rose by approximately 0.3% each, indicating continued investor interest in domestic opportunities.
Rate Cut Anticipated as RBI Looks to Support Growth
The RBI Policy Decision is widely expected to cut its benchmark repo rate by 25 basis points, marking the third straight rate reduction as part of an ongoing monetary easing cycle. This anticipated move is aimed at boosting consumption and investment in an economy that continues to navigate inflationary challenges and global uncertainties.
While the central bank has maintained a cautious approach in previous policy meetings, analysts believe that the time is ripe for a stronger pro-growth stance. Market participants are closely watching not just the RBI Policy Decision and the rate cut itself, but also the RBI’s commentary on inflation targets, liquidity management, and economic growth projections.
“The markets are largely pricing in a 25 basis point rate cut,” said Divam Sharma, co-founder and fund manager at Green Portfolio PMS. “However, what investors are really looking for is a clear signal from the RBI that it is focused on stimulating domestic demand and supporting Indian businesses.”
Investor Focus Shifts to Policy Outlook Beyond Rate Cuts
Beyond the expected rate adjustment, the broader focus remains on the RBI’s strategic roadmap for sustaining economic momentum. With recent data suggesting a mixed recovery, strong in some sectors but lagging in others, analysts are hopeful that the central bank will announce complementary measures to bolster liquidity, credit growth, and investment confidence.
In particular, stakeholders in the small-cap and mid-cap segments are banking on policy cues that will foster growth in sectors such as manufacturing, real estate, and consumer goods, which are sensitive to interest rate movements. The performance of these indices in early trading suggests anticipation of favorable news.
As investors await the policy announcement, the Indian markets are likely to remain range-bound. The coming sessions will hinge on the RBI’s tone and future guidance, especially whether the central bank signals an extended easing cycle or a pause depending on inflation dynamics.
The RBI Policy Decision will set the stage for the next phase of market movements and will be pivotal in shaping investor sentiment in the near term.
