Markets opened on a cautious note Wednesday morning as renewed trade tensions from President Donald Trump’s tariff threats combined with anticipation of the Reserve Bank of India’s monetary policy committee meeting created a subdued trading environment.
The benchmark Sensex opened at 80,694.98, slightly below its previous close of 80,710.25, and was trading at 80,653.66 at 9:45 am, down 56.59 points or 0.07 per cent. The Nifty 50 also opened at 24,641.35 compared to its previous close of 24,649.55, and eased further to 24,626.90 at 9:45 am, down 22.65 points or 0.09 per cent.
Market participants remained on edge following President Trump’s latest statements threatening to impose tariffs on chip and pharmaceutical imports, which could significantly impact Indian IT and pharmaceutical sectors. “President Trump’s threat to impose tariffs on chip and pharma imports is likely to keep pharma stocks under pressure,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
The uncertainty was reflected in mixed sector performance during early trade. Among the top gainers on the Nifty 50, Adani Ports led with a 1.53 per cent rise to ₹1,378.90, followed by Bharti Airtel gaining 0.91 per cent to ₹1,949.40. Trent advanced 0.86 per cent to ₹5,363.00, while HDFC Life and SBI Life posted gains of 0.72 per cent and 0.69 per cent respectively.
On the losing side, pharmaceutical stocks bore the brunt of selling pressure with Dr. Reddy’s Laboratories declining 1.33 per cent to ₹1,198.60. Technology stocks also faced headwinds as HCL Technologies dropped 1.21 per cent to ₹1,464.70, Wipro fell 1.17 per cent to ₹243.04, Sun Pharma declined 1.16 per cent to ₹1,613.10, and Infosys retreated 1.10 per cent to ₹1,444.30.
The broader market sentiment remained cautious as Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth ₹22.48 crore on Tuesday, while Domestic Institutional Investors (DIIs) provided support by purchasing ₹3,840.39 crore worth of stocks.
All attention now shifts to the RBI’s monetary policy committee meeting scheduled at 10 AM, where Governor Sanjay Malhotra is expected to announce the repo rate decision. “All eyes now shift to the RBI’s MPC meet today at 10 AM, where the Street will be watching for cues on repo rate, inflation, and growth amidst this tariff turbulence,” Tapse noted.
With the repo rate currently at 5.5 per cent and inflation at multi-year lows, market expectations remain divided on whether the central bank will opt for a rate cut or maintain a pause. “We suspect a pause,” Tapse added, citing the current economic backdrop.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted the broader economic implications of the ongoing trade tensions. “President Trump’s rhetoric and actions will continue to weigh on markets in the near-term,” he said, warning that India’s GDP growth could decline to around 6.2 per cent from the earlier estimated 6.5 per cent in FY26 due to potential export disruptions.
Technical analysts painted a mixed picture for the day’s trading. “After a flat opening, Nifty can find support at 24,600 followed by 24,500 and 24,400. On the higher side, 24,700 can be an immediate resistance, followed by 24,800 and 24,900,” said Hardik Matalia, Derivative Analyst at Choice Broking.
The volatility index India VIX declined over 2 per cent on Tuesday and was trading at 11.7125, indicating some easing of market nervousness. However, analysts warned that the narrow trading range observed in recent sessions reflects underlying market indecision.
“On Tuesday, the benchmark index Nifty formed a high wave Doji candlestick pattern, signaling market volatility and indecision,” observed VLA Ambala, Co-Founder of Stock Market Today. She advised traders to focus on financial and banking stocks amid the current global and domestic developments.
In the commodities space, gold maintained its safe-haven appeal amid the uncertainty. “Gold maintains its status as a safe-haven asset in the wake of global economic uncertainty, geopolitical tensions, and changing interest rate expectations,” said Aksha Kamboj, VP, India Bullion & Jewellers Association. At ₹1,00,076 per 10 grams, gold continues to attract risk-averse investors.
Silver also showed resilience at ₹1,12,422 per kilogram, with Kamboj noting its dual appeal as both a precious and industrial metal. “Its demand from industries such as solar energy, electric vehicles, and electronics will sustain prices in the future,” she explained.
Looking ahead, sector-specific performance is expected to vary significantly. “Technically, Nifty Auto, Consumer Durable and FMCG are likely to outperform in the short term. On the flip side, Nifty Oil & Gas, Defence, Realty, Media, Capital Market, Financial Services, Private Banks and CPSE are likely to underperform,” noted analysts at SBI Securities.
The morning’s key focus remains on the RBI policy announcement and subsequent commentary, which could provide direction for the markets in the coming sessions. With earnings season also underway, investors are closely watching quarterly results from major companies including Bajaj Auto, Bharat Forge, Divis Labs, and Trent, among others.
Market breadth on Tuesday was decisively negative, with 310 stocks out of the Nifty 500 ending in the red, reflecting the broader cautious sentiment prevailing in the markets. As global uncertainties persist and domestic policy decisions await, Indian markets appear set for a period of consolidation with selective stock-specific movements driving trading activity.
Published on August 6, 2025
