Indian Markets Hold Steady as Investors Await RBI Rate Decision

Indian stock markets opened cautiously on Friday, reflecting investor uncertainty ahead of a key monetary policy announcement by the Reserve Bank of India (RBI). Scheduled for 10 AM, this decision is poised to impact market movements significantly.

The benchmark indices mirrored this apprehensive sentiment. The Nifty 50 started the day at 24,748.70, barely down by 2.20 points or 0.01%, while the BSE Sensex also opened nearly unchanged at 81,434.24, losing 7.80 points or 0.01%. A potential rate cut from the RBI could be a market game-changer, with experts split between a 25 basis points and a 50 basis points cut, the latter likely triggering a market rally.

Broader market indices displayed a slightly upbeat tone. The Nifty 100 opened slightly in the green, and the Nifty Midcap 100 and Nifty Smallcap 100 both saw gains of 0.33%. Volatility levels eased with the India VIX dropping over 4%, indicating calmer investor nerves ahead of the announcement. Among NSE's sectoral indices, most opened positively, except Nifty Private Bank. Sectors like Nifty Media, Nifty Metal, and Nifty Auto saw gains, while Nifty IT remained flat.

Ajay Bagga, a market expert, noted, "In India, markets are in a wait-and-watch mode, keen on the 10 AM RBI MPC meeting outcome." Anticipations hover around a 25 bps rate cut due to controlled consumer inflation, low credit growth, positive monsoon predictions, and a declining US dollar helping emerging market currencies. A more significant cut could bolster market sentiment and trigger a post-announcement rally.

Globally, Asian markets displayed a mixed trend. Japan's Nikkei 225 rose by 0.47%, Singapore's Straits Times increased by 0.14%, and Indonesia's Jakarta Composite gained 0.63%. However, Taiwan's Weighted index saw a marginal decline of 0.08% at the time of reporting.

(With inputs from agencies.)