Global cues are firmly in focus for Indian markets on Wednesday morning, with a sharp rally across Asian equities and a steep correction in crude oil prices setting a positive tone ahead of the Reserve Bank of India’s (RBI) monetary policy decision due later in the day.
With the RBI’s rate verdict expected in the next two hours, market participants are closely tracking both domestic policy signals and global developments that could shape trading sentiment in the near term.
Asian Markets Surge On Ceasefire News
Asian equities staged a strong rebound on Wednesday after reports of a two-week ceasefire between the United States and Iran eased geopolitical concerns.
Japan’s Nikkei 225 led the rally, surging 5.28 per cent or 2,822.44 points. South Korea’s KOSPI followed closely, gaining 5.61 per cent or 308.11 points, reported ANI. Other regional markets also posted solid gains, with Hong Kong’s Hang Seng rising 3.04 per cent or 763.47 points, and Taiwan’s Weighted Index climbing 3.72 per cent or 1,234.69 points.
The rally reflects a sharp improvement in global risk sentiment after weeks of volatility driven by escalating tensions in West Asia.
Gift Nifty Signals Strong Opening For India
India’s Gift Nifty mirrored the global optimism, rising more than 3 per cent to trade at 23,841.00 levels in early deals.
The strong uptick indicates a likely gap-up opening for domestic benchmark indices such as the Nifty 50 and Sensex. Traders will, however, remain cautious ahead of the RBI’s policy announcement, which could influence intraday direction.
Market participants are expected to balance global optimism with domestic policy cues, making today’s session particularly sensitive to news flow.
Oil Prices Slide As Supply Fears Ease
One of the most significant triggers for the global rally has been the sharp fall in crude oil prices.
Brent crude dropped 13.04 per cent to $95.02 per barrel at around 7:24 AM, while US crude fell 13.76 per cent to $97.41 per barrel.
The decline follows confirmation of a temporary easing in tensions and the reopening of the Strait of Hormuz, a key global energy corridor.
Lower oil prices are typically positive for India, which imports a large portion of its crude requirements. A sustained correction in oil prices could help ease inflationary pressures and improve macroeconomic stability.
Gold Gains As Investors Rebalance
Even as oil prices declined, gold moved higher, rising by 100.45 points or 2.13 per cent.
The move suggests that while risk appetite has improved, investors continue to maintain some allocation to safe-haven assets amid lingering uncertainty.
Ceasefire Brings Temporary Relief
The improvement in sentiment comes after Iran agreed to a temporary ceasefire and safe passage through the Strait of Hormuz for two weeks.
Iranian Foreign Minister Seyed Abbas Araghchi said that military operations would be paused if attacks on Iran were halted, signalling a willingness to de-escalate tensions.
“On behalf of the Islamic Republic of Iran, I express gratitude and appreciation for my dear brothers HE Prime Minister of Pakistan Sharif and HE Field Marshal Munir for their tireless efforts to end the war in the region. In response to the brotherly request of PM Sharif in his tweet, and considering the request by the U.S. for negotiations based on its 15-point proposal as well as announcement by POTUS about acceptance of the general framework of Iran’s 10-point proposal as a basis for negotiations, I hereby declare on behalf of Iran’s Supreme National Security Council: If attacks against Iran are halted, our Powerful Armed Forces will cease their defensive operations. For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” Araghchi wrote.
Earlier, US President Donald Trump also announced a pause in military operations, indicating that negotiations could move forward based on existing proposals.
RBI MPC Decision: Key Trigger Ahead
While global cues remain supportive, the immediate focus for Indian markets is the RBI’s monetary policy decision, which is expected shortly.
Investors will be watching not just the repo rate decision but also the central bank’s commentary on inflation, growth and global risks.
The sharp movement in crude oil prices, currency trends and geopolitical developments are likely to influence the RBI’s outlook.
A stable or accommodative policy stance could reinforce the positive sentiment seen in global markets, while any surprise shift may lead to volatility.
What Analysts Are Expecting
Market participants broadly expect the RBI to strike a balanced tone, supporting growth while keeping a close watch on inflation risks.
Ajitabh Bharti, Co-founder and Executive Director, CapitalXB, pointed out that India currently has sufficient fiscal space, giving both the government and the central bank room to remain growth-supportive despite global uncertainty. He suggested that the RBI may continue focusing on reducing the cost of capital, particularly for MSMEs, as sustained growth remains critical in navigating external shocks.
“The need of the hour is strong policy coordination so that growth momentum does not falter,” Bharti said, adding that liquidity conditions are likely to remain comfortable and inflation should stay within the RBI’s policy band over time.
A similar view is echoed by Atul Monga, CEO & Co-Founder, BASIC Home Loan, who expects the central bank to maintain the status quo on rates as it assesses evolving global risks and domestic liquidity conditions.
Monga noted that while higher borrowing costs in recent years have weighed on housing affordability, especially in the mid-income and affordable segments, the recent phase of rate stability is beginning to ease pressure on borrowers.
“A continued pause or slight shift in policy stance can help revive housing demand and improve borrower sentiment,” he said, highlighting that stable rates and better liquidity could further strengthen credit access in the housing market.
He also pointed to a structural shift in borrower behaviour, with increasing preference for digital and transparent lending platforms, which could benefit from a supportive policy environment.
Taken together, these views suggest that while the RBI may avoid immediate policy action, its guidance on liquidity, inflation and growth will be key in shaping market direction.
What Should Investors Expect Today?
The combination of easing geopolitical tensions, falling oil prices and strong global cues suggests a positive start for Indian markets.
However, the RBI’s policy announcement remains the key event risk.
In the near term, sectors sensitive to oil prices, such as aviation, paints and oil marketing companies, may react to the sharp decline in crude. Banking and financial stocks are also expected to be in focus ahead of the policy outcome.
Overall, while global developments have provided relief, the direction of Indian markets through the day will likely hinge on the RBI’s policy signals and guidance.
