RBI's rate cut fails to lift market; Sensex skids 379pts; IT, banks fall

Stock market closing bell, Wednesday, April 9, 2025:The Indian equity markets, despite the Reserve Bank of India's announcement of a relief in the repo rate by 25 basis points, settled on a lower note as the choppy trend persisted on Wednesday, April 9. The markets remained volatile on account of US President Donald Trump's announcement of a 104 per cent tariff on Chinese goods. 

On Wednesday, the Sensex ended 379 points, or 0.51 per cent, lower at 73,847 levels. Similarly, the Nifty50 ended at 22,399 levels, lower by 136 points, or 0.61 per cent, from its previous close. 

The broader basket of mid- and small-cap shares settled lower by up to 0.86 per cent.

 

Global financial markets, analysts said, are witnessing renewed selling pressure following the enactment of reciprocal tariffs. A trade war is escalating global risk, with a rise in US bond yields prompting a sell-off in the world's safe treasury assets. 

 

Earlier today, Sanjay Malhotra-led RBI's Monetary Policy Committee (MPC) announced a reduction in the repo rate by 25 basis points to 6 per cent after concluding their first MPC meeting for the financial year 2025-26 (FY26). The MPC has also changed the policy stance to Neutral from accommodative, indicating an intent to support economic growth amid rising global uncertainties. 

Following this, the shares of rate-sensitive sectors like automobiles, real estate, and financials, including banks, non-banking financial companies (NBFCs), and housing finance companies (HFCs), settled mixed on Wednesday. Among them, FMCG, auto, and consumer durables managed to eke out gains of up to 1.78 per cent.  Banking indices on the NSE, on ther other hand, ended lower, with Nifty PSU Bank being the top laggard, settling down by 2.52 per cent, dragged by Indian Bank and Central Bank of India.

 

A cut in the repo rate, along with the adaptation of an accommodative policy stance, Vinod Nair, head of research, Geojit Investments, said, is taken as a constructive step. "However, it has done little to uplift overall market sentiment, as the world is embracing recessionary risk. The IT sector continues to lag ahead of Q4 results, which are estimated to be weak." 

 

Notably, the Nifty IT index settled down by over 2.19 per cent, dragged by HCL Tech, TCS, and LTI Mindtree.

 

Pharma, Nair believes, remains cautious over potential headwinds arising from the imposition of US tariffs on the industry. "On a positive note, domestic focus sectors like FMCG are trading better due to the lack of recessionary risk from the global slowdown," Nair said.

 

Meanwhile, Ajit Mishra – SVP, research, Religare Broking, expects the ongoing volatility to continue to keep traders cautious, and any near-term relief seems unlikely given the recent tariff-related developments and the onset of the earnings season.

 

Notably, The fear index (India VIX), which gauges the volatility in the markets, settled higher by 4.83 per cent at 21.43 points on Wednesday. "Until volatility, as reflected by the elevated India VIX, cools off, we recommend maintaining a hedged approach to navigate potential sharp swings," Mishra said. 

 

Going forward, he believes investors will react to the IT major, TCS’s results in early trades on Friday, which could influence market direction initially.   Notably, the Indian equity markets will remain closed on April 10, 2025, on account of Shri Mahavir Jayanti.

Nifty50 short-term trend remains weak, faces resistance at 22,500

Nifty50, on the daily charts, has formed a small inside-body candle, which, Shrikant Chouhan, head of equity research at Kotak Securities, said, indicates indecisiveness between the bulls and the bears. Chouhan believes that the current market texture is non-directional, and traders may be waiting for a breakout in either direction.

 

"For day traders, 22,350 would act as a key support zone, while 22,500 could be the key breakout level for the bulls. If the market falls below 22,350, it could retest levels of 22,250–22,200, while a break above 22,500 could push the market toward 22,650–22,700," said Chouhan.

 

Meanwhile, Rupak De, senior technical analyst at LKP Securities, also expects the trend to stay weak below 22,500, with a breakout potentially driving the index to 22,750–22,800. Failure to cross 22,500 may drag it down toward 22,000, De said.