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Below the Quote on Daily Market Commentary by Mr. Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Nifty ended lower by 137 points at 22,399(-0.6%), tracking weakness in global markets and rising concerns over escalating trade tensions as the latest US tariffs kick-in today. The Reserve Bank of India (RBI) reduced its key repo rate for the second consecutive time by 25 basis points, bringing it down to 6% (in-line with expectation) along with a change in policy stance to 'accommodative' from 'neutral' which refers to the approach aimed at boosting economic growth, by keeping interest rates low or injecting liquidity into the economy. It also lowered India's GDP growth projection to 6.5% from earlier 6.7% for FY26, adding cautiousness to market sentiments. The broader market witnessed selling pressure with Nifty Midcap100 and Smallcap100 declining by 0.5% and 0.9% respectively. On the sectoral front, Nifty IT index dropped over 2%, mirroring a decline in the US NASDAQ futures. The technology sector will continue to be in focus as TCS announces Q4 results tomorrow. We expect IT earnings to remain muted with a cautious FY26E guidance. The Pharma Index fell close to 2%, after U.S. President Trump reiterated his plans to impose heavy tariffs on pharmaceutical imports. Nifty Metal cracked 1.5% after Trump announced additional 50% tariffs on China, raising China’s effective tariff rate to 104%. Shares of NBFCs involved in gold financing were under pressure as RBI conveyed plans to issue comprehensive guidelines for loans against gold. The FMCG, consumer durable and auto indices showed resilience despite market descent, one of the factors being prediction of a normal monsoon season by Skymet (a leading private weather forecaster). Realty and auto stocks are likely to be in focus as easing borrowing costs could boost demand for the housing and auto sector. Overall, Indian equities are expected to remain volatile until further clarity on the US tariff front, while the onset of quarterly earnings season could drive stock/sector-specific movements.

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