Indian stock markets experienced volatility on April 9, 2025, influenced by a combination of factors including newly imposed US tariffs on Chinese imports and the Reserve Bank of India's (RBI) monetary policy decisions. The Nifty 50 index opened lower, reflecting a global equity sell-off. Gift Nifty futures also indicated a weak start.
The US government's decision to impose tariffs of up to 104% on Chinese goods has raised concerns about stagflation, impacting market sentiment. Simultaneously, investors are closely watching the RBI's policy announcements. On February 7, 2025, the RBI had cut the repo rate by 25 basis points to 6.25% to stimulate economic growth.
Sectors expected to be affected include pharmaceuticals, facing potential challenges from US tariffs, and banks, financials, autos, and real estate, which may react to RBI interest rate adjustments. Citi Research anticipates limited direct effects on India's GDP from US tariffs but acknowledges broader global downturn risks.
Market analysts suggest that a rate cut by the RBI could make borrowing more affordable, potentially offsetting the marginal impact of US tariffs on India's economic growth.