Indian Markets Anticipate RBI Monetary Policy Easing

US indices fell, erasing gains from Monday's rally, as tariff concerns and disappointing economic data weighed on markets. Losses were broad-based, with growth sectors leading declines following weaker-than-expected data.

President Trump's threats to impose new tariffs on India and pharmaceuticals, combined with broader trade policy uncertainty, unsettled investors. The ISM Services PMI missed forecasts at 50.1, raising fresh concerns about economic momentum.

Despite the economic slowdown signals and Wednesday's decline, equity losses were limited by high market expectations for Federal Reserve rate cuts beginning in September.

The U.S. trade deficit narrowed in June on reduced consumer goods imports, with the trade gap with China hitting its lowest level in over 21 years.

Post-earnings movers were mixed: Palantir surged 7% on better-than-expected results, while AMD and Snap declined after missing revenue or profit targets. Housing and transportation stocks also saw notable strength on the day, while utilities and semiconductor stocks moved to the downside.

The RBI's Monetary Policy Committee (MPC) is expected to cut the repo rate by 25 basis points when it announces its decision today at 10 AM, following its three-day meeting.

Governor Sanjay Malhotra will deliver the announcement. Markets anticipate the rate cut as a response to potential global economic slowdown triggered by the US reciprocal tariffs on international trade. Soft inflation data and moderate demand provide room for an accommodative stance, though global uncertainties—including US trade policies—may influence the policy statement's tone.

The expected cut would inject liquidity into the domestic economy to shield it from global trade disruptions.

Nifty managed to close above its 100 DEMA, currently at 24595. The recent swing low of 24,535 is expected to serve as immediate support. On the upside, 24,785 and 24,950 are two key hurdles for Nifty.

Indian markets are expected to open flat to slightly negative, likely marking time until the 10:00 AM RBI announcement. Market movement will then align with the central bank's rate decision and policy stance for the near term.