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Bourses remain under pressure despite cut in repo rate
Apr-09-2025

Indian equity markets continued their sluggish trade in early afternoon session even after rate-setting six-member monetary policy committee (MPC) voted unanimously to cut the policy repo rate by 25 basis points (bps) from 6.25 per cent to 6 per cent to support growth, which could face headwinds from the ongoing global tariff war. Investors overlooked the report that Reserve Bank of India's MPC has lowered its inflation forecast for the financial year ending in March 2026 (FY26) to 4%, down from 4.2% earlier, citing a sharper-than-expected decline in food prices and easing global crude oil rates. On the global front, Asian markets were trading mostly in red as Japan's consumer sentiment decreased further in March to the lowest level in two years. The seasonally adjusted consumer confidence index weakened to 34.1 in March from 34.8 in February. 

The BSE Sensex is currently trading at 73893.21, down by 333.87 points or 0.45% after trading in a range of 73673.06 and 74103.83. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.04%, while Small cap index was down by 1.25%.

The few gaining sectoral indices on the BSE were FMCG up by 1.53%, Auto up by 0.57% and Consumer Durables was up by 0.16%, while IT down by 2.20%, Realty down by 1.70%, Metal down by 1.65%, TECK down by 1.63% and Industrials was down by 1.30% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 3.53%, Hindustan Unilever up by 2.40%, Titan Company up by 1.88%, Power Grid up by 1.80% and Mahindra & Mahindra up by 1.59%. On the flip side, Infosys down by 2.54%, Tech Mahindra down by 2.42%, Tata Steel down by 2.42%, Eternal down by 2.14% and SBI down by 1.95% were the top losers.

Meanwhile, with an aim to support a shuttering economy hit by reciprocal tariffs imposed by the US, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) unanimously voted to reduce the policy repo rate by 25 basis points to 6.00 per cent with immediate effect, for the second time in a row. Moreover, it also decided to change the stance from neutral to accommodative. Consequently, the standing deposit facility (SDF) rate under the liquidity adjustment facility (LAF) shall stand adjusted to 5.75 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 per cent. This decision is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. 

CPI-based inflation declined by a cumulative 1.6 percentage points during January-February 2025, from 5.2 per cent in December 2024 to a low of 3.6 per cent in February 2025. On the back of a strong seasonal correction in vegetable prices this year, food inflation dropped to a 21-month low of 3.8 per cent in February. Fuel group continued to remain in deflation. Core inflation, after remaining steady in December 2024-January 2025, inched up to 4.1 per cent in February 2025, driven primarily by a sharp pick-up in gold prices. CPI inflation for the financial year 2025-26 is projected at 4.0 per cent, with Q1 at 3.6 per cent; Q2 at 3.9 per cent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent. 

On the economy front, the National Statistics Office (NSO) has estimated real Gross Domestic Product (GDP) growth at 6.5 per cent for 2024-25, on top of 9.2 per cent in 2023-24. Going forward, sustained demand from rural areas, an anticipated revival in urban consumption, expected recovery of fixed capital formation supported by increased government capital expenditure, higher capacity utilisation, and healthy balance sheets of corporates and banks are expected to support growth. Real GDP growth for 2025-26 is now projected at 6.5 per cent, with Q1 at 6.5 per cent; Q2 at 6.7 per cent; Q3 at 6.6 per cent; and Q4 at 6.3 per cent. 

The CNX Nifty is currently trading at 22424.80, down by 111.05 points or 0.49% after trading in a range of 22353.25 and 22468.70. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Nestle up by 3.53%, Hero MotoCorp up by 2.60%, Hindustan Unilever up by 2.43%, Titan Company up by 1.91% and Power Grid up by 1.85%. On the flip side, Wipro down by 4.37%, Trent down by 2.75%, Tata Steel down by 2.48%, Infosys down by 2.45% and Tech Mahindra down by 2.33% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 1298.55 points or 4.09% to 31,714.03, Taiwan Weighted lost 1068.19 points or 6.14% to 17,391.76, Straits Times fell 87.53 points or 2.52% to 3,381.94, Hang Seng declined 83.07 points or 0.41% to 20,044.61, KOSPI dropped 40.53 points or 1.77% to 2,293.70 and Jakarta Composite was down by 2.93 points or 0.05% to 5,993.21. On the flip side, Shanghai Composite was up by 27.1 points or 0.86% to 3,172.65.
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