Indian Indices Slip After RBI Rate Decision and Tariff Threats

GG News Bureau
Mumbai, 6th Aug: Indian benchmark indices, Nifty 50 and Sensex, slipped into the red on Wednesday following the Reserve Bank of India’s (RBI) decision to keep the key lending rate unchanged. Market sentiment was further dampened by a renewed threat of tariffs from US President Donald Trump on Indian imports.

At 10:10 a.m., the Sensex was down 93.44 points, or 0.12 percent, at 80,616.81. The Nifty was trading lower by 53.95 points, or 0.22 percent, at 24,595.60. Market breadth was negative, with approximately 1083 shares advancing, 2049 declining, and 131 remaining unchanged. The broader markets also saw declines, with both the Nifty Midcap 100 and Nifty Smallcap 100 indices slipping 0.8 percent.

Sectoral Trends and Key Market Drivers
The Nifty Pharma index was the top loser, falling by over 1 percent after US President Trump announced he would soon levy tariffs of up to 250 percent on pharmaceutical products. This was part of a larger threat to impose a “substantial” increase in tariffs on Indian imports within 24 hours, citing India’s alleged profit from reselling Russian oil during the Russia-Ukraine conflict.

Other sectors that witnessed selling pressure included IT, Realty, and Energy, while FMCG and Auto indices were marginally lower. On the positive side, Nifty Infra and Media rose 0.38 percent each, with Metal and PSU Bank indices also posting modest gains. Analysts noted that broader sentiment remained cautious, with selective buying observed in defensive and infrastructure-related stocks.

RBI Policy and Global Markets
The RBI’s Monetary Policy Committee maintained the repo rate at 5.5 percent, a decision that was widely expected by analysts as a ‘dovish pause’ amid cooling inflation and global trade tensions. The central bank has already cut the benchmark lending rate by 100 basis points over the past three meetings.

In global markets, US stocks closed lower on Tuesday as investors reacted to the impact of trade duties, while Asian stocks opened with a mixed trend.

Expert Outlook
According to technical analysis from Rajesh Bhosale, Equity Technical Analyst at Angel One, the Nifty is at a “crucial make-or-break juncture,” with the 24,500 zone acting as a key support level.

In derivatives, Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, noted a “defensive and cautious undertone.” He highlighted significant call writing at the 25,000 strike, indicating strong resistance, while the highest put open interest at 24,600 suggested immediate support.