Market under pressure as Trump tariff offsets RBI’s expected rate cut pause

The BSE Sensex fell 166.26 points or 0.21% to settle at 80,543.99 on Wednesday, and the Nifty closed 75.35 points or 0.31% lower at 24,574.20. The Nifty Midcap and Smallcap indices declined over 1% each. Market breadth remained weak, with the Nifty 500 advance-decline ratio at 1:4, reflecting significant profit booking in the broader market.

Barring PSU banks, which outperformed with gains of 0.6%, all other sectoral indices closed in negative territory. IT, Media, Realty, Pharma, and FMCG stocks declined in the range of 1–2%, reflecting sectoral rotation and risk-off sentiment.

“Overall, we expect the market to continue its consolidation as investor sentiment remains cautious amid India-US trade tensions and the ongoing Q1 earnings announcements,” said Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services. Khemka added that defence stocks are likely to be in focus after the Defence Acquisition Council (DAC) cleared a series of capital acquisition proposals worth approximately Rs 67,000 crore.

Commenting on the RBI’s MPC outcome, Dhiraj Relli, MD & CEO of HDFC Securities, said that for investors, close attention should now be paid to monsoon-driven food inflation, the timing and effect of phased CRR reductions, evolving global trade policy, and festive season demand— each of which could influence the trajectory of future rate actions and risk appetite across asset classes.

Gopal Jain, Managing Director and CEO of Gaja Alternative Asset Management, said that for private equity investors, the RBI’s monetary policy reinforces India’s credibility as a resilient, policy-driven economy. “Key sectors such as financial services, consumer and technology are well-positioned to benefit from the supportive rate environment and macroeconomic stability,” he added.