Indian equity markets acted cautiously on Monday, as underlying sentiment remained tense amid global uncertainties and geopolitical tensions. The BSE Sensex opened trading near 73,250, slipping more than 50 points, while the NSE Nifty50 tested 22,700, around 9:15 AM.
However, around 9:08 AM in the pre-open session, the Sensex was at 73,480.75, up 161.20 points or 0.22 per cent, while the Nifty50 stood at 22,780.30, higher by 67.20 points or 0.30 per cent.
Despite the early uptick, analysts expect volatility to persist through the week, with multiple global and domestic triggers likely to influence market direction.
RBI Policy Decision In Focus
Domestically, the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting will be a key event for investors.
Market participants are largely factoring in a pause in interest rates, but the central bank’s commentary on inflation, growth outlook and the future rate trajectory will be closely tracked.
“The RBI is walking a tightrope between crude-driven inflation risks and a softening growth impulse, as reflected in recent data,” said Vinod Nair, Head of Research at Geojit Investments Ltd.
Global Data, Fed Outlook Key Triggers
On the global front, investors will keep a close watch on key macroeconomic indicators, particularly the US March Consumer Price Index (CPI) data.
Stronger inflation data could dampen expectations of a US Federal Reserve rate cut, strengthen the dollar and tighten global financial conditions, especially for emerging markets like India.
Additionally, the US Federal Open Market Committee (FOMC) meeting minutes, GDP data and jobless claims will be monitored for further policy cues.
West Asia Conflict Remains Overhang
Geopolitical developments in West Asia continue to be a major source of uncertainty for markets.
Analysts said markets remain highly sensitive to any escalation or de-escalation in the conflict, particularly given its impact on global energy supply chains.
“Crude trajectory and any credible ceasefire signal will be decisive variables that could either trigger a relief rally or extend the current cautious trend,” Nair added.
Crude Oil, Rupee Movement Under Watch
Brent crude prices have remained elevated near $107 per barrel, sustaining concerns around imported inflation.
Currency volatility has also been in focus, with the rupee weakening sharply before recovering towards Rs 93 against the US dollar, aided by intervention by the central bank.
Elevated oil prices and currency pressure continue to weigh on investor sentiment.
FII Outflows Continue To Pressure Markets
Foreign investor activity remains a key concern. March witnessed heavy outflows of around Rs 1.2 lakh crore from Indian equities, among the highest monthly outflows in recent years.
Analysts said sustained FII selling, coupled with global uncertainties, continues to act as a major overhang for domestic markets.
Global Markets Mixed, Caution Persists
Global cues remain mixed. While Asian markets showed some resilience in early trade, with Japan’s Nikkei 225 rising 1.19 per cent and South Korea’s Kospi gaining 1.36 per cent, US markets ended on a mixed note in the previous session.
The Dow Jones Industrial Average declined 0.13 per cent, while the S&P 500 and Nasdaq Composite edged higher.
Trump’s Warning Adds To Uncertainty
Fresh geopolitical developments over the weekend have further added to market jitters.
US President Donald Trump warned of potential action against Iran’s power infrastructure if the Strait of Hormuz is not fully reopened, setting a deadline for compliance.
Iran, in response, indicated that full reopening would depend on compensation for damages, raising concerns over prolonged disruption in global energy flows.
Previous Week’s Performance
In the previous, holiday-shortened week, domestic markets ended marginally lower. The Sensex declined 263.67 points, or 0.35 per cent, while the Nifty slipped 106.5 points, or 0.46 per cent.
