Indian Markets Expected to Open Steady Ahead of RBI Decision
On Friday, Indian stock markets are anticipated to open with little change as investors await the Reserve Bank of India (RBI)’s policy announcement. There’s a keen interest in understanding the central bank’s guidance on growth and liquidity, especially with expectations of holding interest rates steady.
As of 7:06 a.m. IST, Nifty futures were trading at 25,602.5 points, suggesting that the Nifty 50 index will open around its previous close of 25,642.8.
Analysts believe the RBI will likely keep rates unchanged, thanks to manageable inflation and reduced concerns over U.S. tariffs, which follow recent budget measures aimed at boosting manufacturing and exports alongside a trade agreement with the U.S.
Most economists polled prior to the India-U.S. trade deal also anticipated that the RBI would maintain current interest rates. “With no immediate worries regarding growth or inflation, the RBI is expected to hold rates steady in their upcoming meeting,” noted Sonal Badhan, an economist at Bank of Baroda. She also mentioned that the central bank might adopt a “neutral” stance, leaving the option open for a potential rate cut in the future.
Since February 2025, the RBI has reduced rates by 125 basis points, marking its most aggressive easing since 2019. This move was intended to support the economy and financial markets, which have seen underperformance compared to emerging markets in Asia, largely due to weak earnings and significant foreign outflows.
India’s economy is projected to grow by 7.4% in the current financial year, with the government’s chief economic adviser forecasting growth between 6.8% and 7.2% for the next fiscal year starting in April.
The RBI’s upcoming decision follows a period of significant market fluctuations triggered by both the budget announcement and the recent trade agreement with the United States. Markets experienced a drop during a special trading session on budget day after the government proposed an increase in the derivatives transaction tax but saw a rebound with the announcement of the trade deal. However, they fell again on Thursday.
Despite these ups and downs, the Nifty 50 has gained 1.3% this week, positioning it for its best weekly performance in three months.
In other news, Asian markets opened lower by 1.1%, while U.S. stocks declined overnight, particularly in the tech sector, amid concerns about the impact of artificial intelligence innovations.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sonia Cheema and Rashmi Aich
