The Reserve Bank of India is set to announce its latest monetary policy decision, with widespread expectation that the central bank will reduce the repo rate by 25 basis points—from the current 6.25% to 6%. This move, if implemented, is expected to ease interest rates on bank loans, especially as banks have begun linking lending rates to the repo.
However, the spotlight has shifted sharply to geopolitical developments, as a new round of aggressive US tariffs come into effect today under the Trump administration. With no signs of softening from Washington, global markets are reeling. Asian indices opened sharply lower, tracking losses in US futures, which were down over 1.5% across the board. Indian equities are also expected to open weak.
Brent crude slipped further to near $60 a barrel, while US WTI crude fell below $57, as fears of a full-blown tariff war intensified. The sell-off reflects deepening concerns over global demand amid recessionary fears.
As of today, the US has implemented new tariffs on imports from all countries, imposing a 10% duty across the board starting Saturday. China faces an even steeper tariff of 104% from today, while Indian exports are now subject to a 26% levy.
Despite appeals from global business leaders to delay or reconsider the move—especially for countries other than China—the Trump administration has gone ahead with its plans. In a dramatic escalation, mail-order Chinese goods now attract a punitive 90% tariff, tripling the previously announced rate of 30%. The US also plans to increase tariffs to as much as 180% starting June 1.
Trump has indicated that pharmaceutical imports may be next, with duties expected to be imposed imminently to push manufacturing back to the US. Earlier, a 25% tariff on drugs had been signalled.
Apart from the repo rate, the RBI is expected to reduce the Standing Deposit Facility rate from 6% to 5.75%. With banks now enjoying a liquidity surplus after several months of tight conditions, no changes are expected to the Cash Reserve Ratio (CRR at 4%) or the Statutory Liquidity Ratio (SLR at 18%).
The last repo cut from 6.5% to 6.25% came under new Governor Sanjay Malhotra. A further rate cut today is likely to nudge banks to reduce lending rates across the board.
European markets closed 2.7% higher on Tuesday, buoyed by hopes of a resolution to the tariff deadlock. However, the optimism proved short-lived, as the Trump administration rejected an EU proposal for mutual zero tariffs on industrial goods.
US indices, which had opened higher, slumped into the red by close. The tech-heavy Nasdaq was the worst hit, falling 2.15%. The Dow dropped 320 points (0.84%) to 37,645.59, while the S&P 500 lost 79.48 points (1.57%) to end at 4,982.77.
In early Wednesday trade, US futures remain under pressure: Dow down 1.36%, S&P 1.60%, and Nasdaq 1.71%.
Asian markets followed suit this morning. Japan’s Nikkei tumbled more than 3.5%, while Hong Kong’s Hang Seng and China’s CSI indices also opened lower.
On Tuesday, Indian equities staged a sharp rally, buoyed by hopes of a temporary understanding between India and the US that could shield Indian exports from the harshest tariff measures.
The Nifty jumped 374.25 points (1.69%) to close at 22,535.85, while the Sensex surged 1,089.18 points (1.49%) to 74,227.08. Bank Nifty rose 1.31% to end at 50,511.00. Mid cap and small cap indices outperformed, gaining over 2% each.
Market breadth was strong. On the BSE, 3,074 stocks advanced against 898 declines. On the NSE, 2,391 shares gained while 499 slipped. Seventeen stocks hit 52-week highs, and 22 hit lows. Meanwhile, 124 stocks hit upper circuits, compared to 45 in lower circuits.
Foreign Institutional Investors (FIIs) offloaded ₹4,994.24 crore worth of equities, while Domestic Institutional Investors (DIIs) bought stocks worth ₹3,097.24 crore.
Gold prices continued their slide. After trading above $3,000 per ounce for most of Tuesday, the yellow metal slipped to $2,982.70 by the US afternoon close. This morning, prices recovered slightly to $2,998.
Michele Schneider, chief strategist at MarketGauge, said it's not yet time to buy gold or silver, noting that the macroeconomic environment remains too volatile and may present better opportunities ahead.
In Kerala, gold prices fell by ₹480 to ₹65,800 per sovereign on Monday.
Silver remains under pressure, down 13% recently; now at $29.70/oz internationally. Rubber and coffee edged higher in international holiday markets, while cocoa dropped 2.51%. Edible oils moved up.
The dollar index, after fluctuating through Tuesday, closed at 102.96 and has since dipped to 102.38. Meanwhile, yields on 10-year US treasuries climbed to 4.34% this morning as prices fell amid fears of rising inflation and interest rates.
The Indian rupee continued its decline—down 0.70% on Monday and another 0.50% on Tuesday—closing at ₹86.26 to the dollar. Pressure on the rupee is mounting due to the weakening of the Chinese yuan, which has slipped to 7.34 against the dollar. With China reportedly preferring a weaker yuan to cushion export pain from US tariffs, the rupee is facing parallel pressure.
Crude oil prices resumed their downward trajectory, with US WTI falling to $56.92 per barrel. Brent crude closed at $62.82 on Tuesday and slipped further to $60.33 this morning. UAE’s Murban crude also declined to $61.51.
Market sentiment is weighed down by tariff war fears, which threaten to crimp global demand.
The global risk-off mood also hit crypto markets. Bitcoin dropped to $75,650, while Ethereum fell below $1,425 as investors moved away from volatile assets amid recession fears.
The Reserve Bank of India is set to announce its latest monetary policy decision, with widespread expectation that the central bank will reduce the repo rate by 25 basis points—from the current 6.25% to 6%. This move, if implemented, is expected to ease interest rates on bank loans, especially as banks have begun linking lending rates to the repo.
However, the spotlight has shifted sharply to geopolitical developments, as a new round of aggressive US tariffs come into effect today under the Trump administration. With no signs of softening from Washington, global markets are reeling. Asian indices opened sharply lower, tracking losses in US futures, which were down over 1.5% across the board. Indian equities are also expected to open weak.
Brent crude slipped further to near $60 a barrel, while US WTI crude fell below $57, as fears of a full-blown tariff war intensified. The sell-off reflects deepening concerns over global demand amid recessionary fears.
As of today, the US has implemented new tariffs on imports from all countries, imposing a 10% duty across the board starting Saturday. China faces an even steeper tariff of 104% from today, while Indian exports are now subject to a 26% levy.
Despite appeals from global business leaders to delay or reconsider the move—especially for countries other than China—the Trump administration has gone ahead with its plans. In a dramatic escalation, mail-order Chinese goods now attract a punitive 90% tariff, tripling the previously announced rate of 30%. The US also plans to increase tariffs to as much as 180% starting June 1.
Trump has indicated that pharmaceutical imports may be next, with duties expected to be imposed imminently to push manufacturing back to the US. Earlier, a 25% tariff on drugs had been signalled.
Apart from the repo rate, the RBI is expected to reduce the Standing Deposit Facility rate from 6% to 5.75%. With banks now enjoying a liquidity surplus after several months of tight conditions, no changes are expected to the Cash Reserve Ratio (CRR at 4%) or the Statutory Liquidity Ratio (SLR at 18%).
The last repo cut from 6.5% to 6.25% came under new Governor Sanjay Malhotra. A further rate cut today is likely to nudge banks to reduce lending rates across the board.
European markets closed 2.7% higher on Tuesday, buoyed by hopes of a resolution to the tariff deadlock. However, the optimism proved short-lived, as the Trump administration rejected an EU proposal for mutual zero tariffs on industrial goods.
US indices, which had opened higher, slumped into the red by close. The tech-heavy Nasdaq was the worst hit, falling 2.15%. The Dow dropped 320 points (0.84%) to 37,645.59, while the S&P 500 lost 79.48 points (1.57%) to end at 4,982.77.
In early Wednesday trade, US futures remain under pressure: Dow down 1.36%, S&P 1.60%, and Nasdaq 1.71%.
Asian markets followed suit this morning. Japan’s Nikkei tumbled more than 3.5%, while Hong Kong’s Hang Seng and China’s CSI indices also opened lower.
On Tuesday, Indian equities staged a sharp rally, buoyed by hopes of a temporary understanding between India and the US that could shield Indian exports from the harshest tariff measures.
The Nifty jumped 374.25 points (1.69%) to close at 22,535.85, while the Sensex surged 1,089.18 points (1.49%) to 74,227.08. Bank Nifty rose 1.31% to end at 50,511.00. Mid cap and small cap indices outperformed, gaining over 2% each.
Market breadth was strong. On the BSE, 3,074 stocks advanced against 898 declines. On the NSE, 2,391 shares gained while 499 slipped. Seventeen stocks hit 52-week highs, and 22 hit lows. Meanwhile, 124 stocks hit upper circuits, compared to 45 in lower circuits.
Foreign Institutional Investors (FIIs) offloaded ₹4,994.24 crore worth of equities, while Domestic Institutional Investors (DIIs) bought stocks worth ₹3,097.24 crore.
Gold prices continued their slide. After trading above $3,000 per ounce for most of Tuesday, the yellow metal slipped to $2,982.70 by the US afternoon close. This morning, prices recovered slightly to $2,998.
Michele Schneider, chief strategist at MarketGauge, said it's not yet time to buy gold or silver, noting that the macroeconomic environment remains too volatile and may present better opportunities ahead.
In Kerala, gold prices fell by ₹480 to ₹65,800 per sovereign on Monday.
Silver remains under pressure, down 13% recently; now at $29.70/oz internationally. Rubber and coffee edged higher in international holiday markets, while cocoa dropped 2.51%. Edible oils moved up.
The dollar index, after fluctuating through Tuesday, closed at 102.96 and has since dipped to 102.38. Meanwhile, yields on 10-year US treasuries climbed to 4.34% this morning as prices fell amid fears of rising inflation and interest rates.
The Indian rupee continued its decline—down 0.70% on Monday and another 0.50% on Tuesday—closing at ₹86.26 to the dollar. Pressure on the rupee is mounting due to the weakening of the Chinese yuan, which has slipped to 7.34 against the dollar. With China reportedly preferring a weaker yuan to cushion export pain from US tariffs, the rupee is facing parallel pressure.
Crude oil prices resumed their downward trajectory, with US WTI falling to $56.92 per barrel. Brent crude closed at $62.82 on Tuesday and slipped further to $60.33 this morning. UAE’s Murban crude also declined to $61.51.
Market sentiment is weighed down by tariff war fears, which threaten to crimp global demand.
The global risk-off mood also hit crypto markets. Bitcoin dropped to $75,650, while Ethereum fell below $1,425 as investors moved away from volatile assets amid recession fears.
