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EQUITY
Key gauges end lower despite RBI's rate cut
Apr-09-2025

Indian equity benchmarks ended lower by over half percent on Wednesday due to losses in IT, Realty and Capital Goods stocks. Sentiment took a hit following the announcement of fresh U.S. tariffs on China, leading to a gap-down opening and a largely range-bound session thereafter. The RBI's rate cut failed to lift investor sentiment on Dalal Street.

Some of the important factors in today’s trade: 

RBI cuts interest rate by 25 bps to 6%: The RBI has slashed key interest rate by 25 basis points, for the second time in a row, to support a shuttering economy hit by reciprocal tariffs imposed by the US. Following the rate cut, the key policy rate eased to 6 per cent providing relief to home, auto and corporate loan borrowers.

RBI worried about tariff war impact on growth: Amid the ongoing global tariff war, Reserve Bank Governor Sanjay Malhotra said he is more worried about its impact on growth than inflation. He said RBI has reduced the growth forecast for 2025-26 by 20 basis points to 6.5 per cent.

Rupee falls amid global turmoil: Indian rupee extended its losing streak for the fourth straight session and settled sharply lower against the US dollar, amid escalating tariff turbulence globally even as the Reserve Bank reduced key interest rate by 25 basis points as a growth-stimulus measure. 

Indian economy likely to grow 6.7% in FY25: The Asian Development Bank (ADB) has said that India’s gross domestic product (GDP) is expected to expand by 6.7% in fiscal year (FY) 2025, on account of higher domestic demand, rising rural incomes, a strong services sector, and moderating inflation that will boost consumer confidence. 

Global cues remain weak: European markets were trading lower as recessions fears intensified following U.S. President Donald Trump's tariffs, including a 20% levy on European Union imports becoming effective today. Asian markets settled mostly down on Wednesday as U.S. President Donald Trump pressed ahead with sweeping new global tariffs, including over 100 percent in levies against Chinese goods.

Finally, the BSE Sensex fell 379.93 points or 0.51% to 73,847.15, and the CNX Nifty was down by 136.70 points or 0.61% to 22,399.15.   

The BSE Sensex touched high and low of 74,103.83 and 73,673.06 respectively. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.73%, while Small cap index was down by 1.08%.

The top gaining sectoral indices on the BSE were FMCG up by 1.51%, Consumer Durables up by 0.32% and Auto up by 0.07%, while IT down by 2.01%, Realty down by 2.00%, Capital Goods down by 1.65%, TECK down by 1.57% and Metal down by 1.44% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 3.24%, Hindustan Unilever up by 2.63%, Titan Company up by 1.66%, Power Grid Corporation up by 1.56% and Ultratech Cement up by 1.03%. On the flip side, SBI down by 3.43%, Tech Mahindra down by 3.35%, Larsen & Toubro down by 3.23%, Tata Steel down by 2.30% and Sun Pharma down by 2.18% were the top losers.

Meanwhile, amid the rapidly evolving global trade landscape as a result of US tariffs, Finance Minister Nirmala Sitharaman has said that the resilience of the economy and strength of domestic demand will continue to make India an engine of growth. She asserted that the economy was well placed to capitalise on domestic efficiencies and competitiveness as it tackles global headwinds. She also expressed her optimism over the successful conclusion of the India-UK Free Trade Agreement (FTA) negotiations ‘sooner rather than later’, along with a Bilateral Investment Treaty.

The minister said ‘The world has seen depressed growth for over several years, earlier it was low interest for long and now it’s going to be low growth for long, and that’s not happy news for anybody’. She added ‘India has maintained its fastest growing economy tag continuously now for five years and we still think that momentum may moderate a bit, but it will still be India who will keep that growth… as our growth gets calibrated because of the consumption which exists domestically. It is backed by demand for global-standard goods and that is why globalisation since the 1990s has given India many opportunities’.

She noted that ‘The US is the leading trade partner for India. So, at a time when trade is going to be influenced by tariffs, measures which the US government is taking, we still will have to make sure that the strength that India has in domestic demand as a big magnet which can attract global supplies must be sustained and boosted’. She said the strength of this demand would prove attractive for foreign direct investment (FDI) and international manufacturing to supply for the domestic market and also export from India. She said ‘We think India, and a few emerging markets, are going to be the engines of growth. The global depressed growth, if it has to pick up, will have to be because of these engines’.

The CNX Nifty traded in a range of 22,468.70 and 22,353.25. There were 18 stocks advancing against 32 stocks declining on the index.   

The top gainers on Nifty were Nestle up by 3.28%, Hindustan Unilever up by 2.61%, Titan Company up by 1.81%, Power Grid Corp up by 1.78% and Tata Consumer Product up by 1.66%. On the flip side, Wipro down by 4.23%, SBI down by 3.40%, Tech Mahindra down by 3.31%, Larsen & Toubro down by 3.13% and Trent down by 2.97% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 216.72 points or 2.74% to 7,693.81, France’s CAC fell 208.64 points or 2.94% to 6,891.78 and Germany’s DAX lost 622.04 points or 3.07% to 19,658.22.

Asian markets settled mostly down on Wednesday tracking Wall Streets’ fall overnight on concerns over the tariffs war between the US and China after the White House confirmed 104% tariff on China, effective today, following China retaliatory measures against the US. Chinese shares rose amid growing speculation that authorities will roll out stimulus to shield the economy from Trump‘s tariffs. Market participants closely watch further insights into the Fed’s monetary policy outlook ahead to the minutes from the Federal Reserve’s latest policy meeting due today, along with consumer inflation data on Thursday and the producer price report on Friday.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,186.81

41.26

1.29

Hang Seng

20,264.49

136.81

0.68

Jakarta Composite

5,967.99

-28.15

-0.47

KLSE Composite

1,400.59

-42.97

-2.98

Nikkei 225

31,714.03

-1,298.55

-4.09

Straits Times

3,393.69

-75.78

-2.23

KOSPI Composite

2,293.70

-40.53

-1.77

Taiwan Weighted

17,391.76

-1,068.19

-6.14
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