Indian shares set to open lower ahead of RBI policy decision
April 9 (Reuters) - Indian shares are set to open lower on Wednesday, tracking a global equity sell-off driven by escalating trade tensions, with investors eyeing the Reserve Bank of India's policy decision for an interest rate cut and growth support.
The Gift Nifty futures were trading at 22,445.50 as of 7:43 a.m. IST, indicating that the benchmark Nifty 50 (.NSEI), opens new tab will open below Tuesday's close of 22,535.85.
Overnight, Wall Street equities plunged after the U.S. said 104% duties on Chinese imports will take effect shortly after Wednesday midnight, driving up "stagflation" concerns.
In the RBI's last policy meeting on February 7, the repo rate was cut by 25 basis points to 6.25% to spur growth.
Since then, economic uncertainty has risen due to the punishing U.S. trade tariffs, heightening expectations for supportive measures from the RBI. The bank's decision is expected at 10:00 a.m. IST.
"While India is relatively better-positioned than the rest of Asia regarding U.S. tariffs, ripple effects from a global slowdown are inevitable, necessitating support from the RBI." said Ankita Pathak, macro strategist and global equities fund advisor at Ionic Asset by Angel One.
A rate cut is largely priced in, but some brokerages anticipate a shift to an "accommodative" policy stance from "neutral," alongside steps to maintain surplus liquidity.
Citi Research estimated the impact of U.S. tariffs on India's GDP at 0.06% and expected three 25-basis-points cuts in 2025, starting Wednesday, to address the domestic economy's downside growth risks.
The Nifty has slipped 1.6% in the last two sessions and remains 14.2% off its record peak scaled on September 27, 2024, pressured by weak corporate earnings, slowing growth, foreign outflows and global trade-related concerns.
STOCKS TO WATCH
** Pharma stocks (.NIPHARM), opens new tab could fall after Trump said he will be announcing "major tariffs" on pharmaceutical imports
** Domestic rate-sensitive sectors, such as banking (.NSEBANK), opens new tab, financials (.NIFTYFIN), opens new tab, auto (.NIFTYAUTO), opens new tab and real estate (.NIFTYREAL), opens new tab stocks, are likely to react to RBI's rate decision
** Upstream oil companies, such as ONGC (ONGC.NS), opens new tab and Oil India (OILI.NS), opens new tab, could be in focus as crude oil prices drop to their lowest in more than four years on looming demand concerns due to U.S-China tariff war
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