StockMarket – Indian Benchmarks Slip After RBI Policy, Investors Stay Cautious

StockMarket – India’s benchmark equity indices opened lower on Thursday and continued to trade in negative territory following the Reserve Bank of India’s monetary policy announcement. Both headline indices showed mild losses, reflecting restrained investor sentiment and a lack of strong domestic triggers to guide market direction.

At around 11:32 am, the Nifty50 was trading at 25,590.45, down 52 points or 0.20 percent, slipping below the 25,600 mark. The BSE Sensex was also marginally lower, trading at 83,231.59, a decline of nearly 82 points or 0.10 percent. Market participants largely stayed on the sidelines as the indices moved within a narrow range through the session.

Markets Consolidate Amid Policy Clarity

Trading activity suggested consolidation rather than a decisive trend, with investors closely tracking cues from the central bank while avoiding aggressive positions. Analysts observed that repeated attempts by the Nifty to either extend gains or deepen losses failed to sustain momentum, reinforcing the view that markets are currently in a phase of consolidation.

The RBI’s Monetary Policy Committee was widely expected to maintain the status quo on interest rates, and that expectation limited any sharp reaction from equities. With no surprise announcement on rates or policy stance, the broader market remained range-bound.

Global Risk-Off Mood Weighs on Sentiment

Market experts pointed to weakening global risk appetite as an additional factor influencing Indian equities. According to Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, several global asset classes have recently shown signs of stress, highlighting a broader shift toward risk aversion.

He noted that cryptocurrencies have seen sharp declines, while silver prices have retreated significantly from recent highs. Even gold, traditionally viewed as a safe-haven asset, has shown weakness despite heightened geopolitical uncertainty. This trend, he said, reflects nervousness across global markets.

Technology Stocks and AI Trade Under Pressure

Dr. Vijayakumar also highlighted ongoing weakness in global technology stocks. The Nasdaq index, which has a heavy concentration of technology and artificial intelligence-related companies, has fallen about 6 percent from its recent peak. The sell-off in tech and AI stocks suggests that investors are reassessing valuations in these segments.

While a cooling of the AI-driven rally could eventually benefit Indian markets in the medium term, analysts believe further correction in global AI stocks may be needed before positive spillover effects are felt domestically. Investors are therefore closely monitoring movements in global technology shares for clues on future trends.

Foreign Investors Turn Cautious Again

Another factor weighing on the market was the return of foreign institutional selling. Foreign portfolio investors were net sellers on Thursday, offloading Indian equities worth approximately Rs 2,150 crore. Additionally, increased short positions by foreign investors in the derivatives market signaled expectations of near-term weakness.

In contrast, domestic institutional investors provided some stability, emerging as net buyers with purchases worth around Rs 1,130 crore. Their participation helped limit deeper losses and supported the broader market during the session.

Limited Upside Expected From Policy Outcome

Market participants broadly agree that a rate cut from the MPC was unlikely at this meeting, and that expectation has already been priced in. Analysts also see little chance of a change in the policy stance. However, a slightly dovish tone in the RBI’s commentary or an upward revision in growth projections for FY27 could offer modest support to sentiment.

Until clearer signals emerge, investors are expected to maintain a cautious approach, focusing on global developments, institutional flows, and earnings-related updates for direction.

Weak Global Cues Add Pressure

Overseas markets provided little encouragement, adding to the cautious mood. S&P 500 futures were down nearly 0.9 percent in early Asian trading. In Asia, Hong Kong’s Hang Seng futures declined 1.4 percent, Japan’s Topix fell 1 percent, and Australia’s S&P/ASX 200 slipped 1.6 percent. European markets also indicated a weak start, with Euro Stoxx 50 futures down 1.1 percent.

With global cues remaining fragile and domestic triggers limited, analysts expect Indian equities to continue consolidating in the near term.