Due to a weakening economy and poor corporate earnings, the Nifty 50 has down 4.4% since the last policy meeting in December.
As investors awaited the Reserve Bank of India’s (RBI) monetary policy announcement, the Indian benchmark indices, the Sensex and Nifty, opened flat on Friday. The central bank is expected to announce its first rate drop since May 2020, as the economy is faltering and the government has already lowered personal income tax to increase spending.
The Nifty fell 13 points, or 0.06 percent, to 23,589 at 9:20 am, while the Sensex down 71 points, or 0.09 percent, to 77,986. Approximately 1,213 shares rose, 1,120 shares fell, and 109 shares did not change.
Due to a weakening economy and poor corporate earnings, the Nifty 50 has down 4.4% since the last policy meeting in December. After keeping a protracted pause since 2022, analysts predict the RBI will make a change by lowering the repo rate by 25 basis points to 6.25%.
The Indian rupee fell to a historic low on Thursday due to the U.S.-China trade conflict and foreign selling. In February, Indian shares valued at Rs 9,709 crore were sold by foreign institutional investors (FIIs).
A Wider Market :
The market as a whole underperformed the benchmarks, with the BSE Midcap index falling 0.4% and the BSE Smallcap index falling nearly 1%.
Sector-specific Update :
Among the sectors indexes that showed weakness and contributed to the decline of the Nifty were Nifty IT and Nifty Oil & Gas. The Nifty IT lost 0.6% and the Nifty Oil & Gas sank almost 1%.
“The Nifty and Sensex saw a loss in yesterday’s trade despite favourable fundamentals like strong global cues, a steep decline in US Treasury yields to 4.428%, a declining US dollar below 107.50, and plummeting oil prices below $71.50,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities.
The conclusion of today’s RBI MPC meeting, where Sanjay Malhotra, the new RBI Governor, is anticipated to make his first policy announcement at 10 AM, will be the market’s main focus. Even though rates haven’t changed in two years, the market is expecting a 25 basis point rate cut to spur growth because the Union Budget prioritised consumption over capital expenditures.