Stock Market Today: RBI Cuts Repo Rate by 25 Basis Points to 6%

Track Sensex and Nifty movements, RBI's rate cut decision, and key performing Stocks across sectors

The Indian stock market witnessed a volatile trading session on April 9, 2025, with benchmark indices closing lower as global trade tensions escalated and the Reserve Bank of India (RBI) implemented a policy rate cut in a bid to support economic growth. Broader investor sentiment remained cautious due to geopolitical pressures, fresh tariffs from the United States, and concerns over slowing global demand.

Market Overview

The BSE Sensex declined by 382 points to settle at 73,845.10, while the NSE Nifty 50 fell by 135 points, closing at 22,400.55. Selling pressure was visible across major sectors, especially in information technology and pharmaceutical stocks, which bore the brunt of the global economic uncertainty and trade-related announcements from the United States.

Mid-cap and small-cap indices also ended in the red, though losses were relatively contained in comparison to large-cap counters. The market breadth remained negative, with a larger number of stocks declining than advancing on both exchanges.

Key Factors Driving the Market

1. RBI Cuts Repo Rate by 25 Basis Points

The Reserve Bank of India reduced the benchmark repo rate by 25 basis points, bringing it down to 6%. Additionally, the central bank altered its policy stance from “neutral” to “accommodative,” signaling a pivot toward growth-focused policy measures in response to slowing domestic demand and external headwinds.
The Monetary Policy Committee (MPC) acknowledged that inflation remained within a manageable range, and therefore room existed for a policy intervention aimed at supporting the broader economy. Despite the rate cut, equity markets did not rally as expected, primarily due to the overshadowing influence of global developments.

2. US Tariffs on Imports Spark Global Selloff

Global equity markets, including those in Asia and Europe, registered losses following a major policy decision by the United States government to impose fresh tariffs on Chinese and Indian imports. The US President announced tariffs as high as 104% on Chinese goods and introduced stricter trade policies targeting pharmaceutical and information technology exports from other nations, including India.

These developments triggered widespread uncertainty among global investors, leading to risk-off sentiment and a flight to safety. Indian markets, deeply integrated with the global financial system, reacted negatively to the external shocks.

3. Weakness in IT and Pharma Stocks

The Nifty IT index plunged by 2.4%, with heavyweights such as Infosys and Tech Mahindra leading the losses. The U.S.-centric business models of these firms made them vulnerable to trade restrictions, especially amid renewed fears of recession in the world’s largest economy.

Similarly, the Nifty Pharma index fell by 1.8% as investors anticipated tighter scrutiny and pricing pressure in the U.S. market. Companies like Biocon and Lupin faced declines ranging from 3% to 5%. The broader concern was that Indian pharmaceutical exports, which account for a significant share of revenue, might come under regulatory or tariff pressures.

4. Auto Sector Outperforms

In an otherwise subdued session, the BSE Auto index provided a bright spot, gaining around 0.5%. Stocks such as Hero MotoCorp and Mahindra & Mahindra recorded notable gains due to strong monthly vehicle sales data and expectations of increased domestic demand following the RBI's rate cut. The sector is also expected to benefit from potential government incentives for electric vehicles and rural-focused consumption.

5. Currency Market Movement

The Indian rupee weakened against the U.S. dollar, trading at 86.65 per dollar, down 0.4% from the previous close. The fall in the rupee was partly due to broad-based strength in the dollar and the decline in the Chinese yuan, which impacted the sentiment for emerging market currencies. The RBI’s rate cut also contributed to the rupee’s slide, as lower interest rates can reduce foreign inflows into debt markets.

Sectoral Performance Summary

Global Market Influence

Asian markets, including Nikkei 225, Hang Seng, and Shanghai Composite, closed sharply lower following the U.S. tariff announcements. European markets also opened weak, indicating a continuation of the global selloff. Market sentiment across geographies was dampened by the fear of a potential trade war and its implications for global growth.

In the U.S., stock futures pointed to a negative opening, indicating investor concern over the impact of tariffs on corporate profitability and consumer prices. Oil prices saw slight declines, as fears of slowing demand counterbalanced geopolitical supply risks.

Outlook for Indian Markets

The near-term outlook remains volatile, with heightened sensitivity to global developments, especially those related to trade policy and geopolitical tensions. The RBI’s accommodative stance is expected to offer some cushion to the economy, particularly for interest rate-sensitive sectors like real estate, automobiles, and banking.

However, sustained foreign institutional investor (FII) selling, depreciation in the rupee, and global headwinds could keep the markets range-bound or under pressure. Analysts are closely watching corporate earnings for Q4 FY25, which are expected to provide further direction for the markets.

Fundamentally strong stocks, especially in domestic-focused sectors like banking, auto, infrastructure, and consumer durables, may offer better resilience amid global volatility. Defensive sectors such as FMCG and utilities are also likely to remain in focus during risk-off phases.

April 9, 2025, turned out to be a challenging day for the Indian stock market, weighed down by global uncertainty, U.S. tariff announcements, and cautious investor sentiment. While the RBI's proactive move to cut interest rates reflects a supportive domestic policy framework, it remains to be seen whether it will be enough to offset the impact of external shocks. Market participants are advised to stay cautious, focus on quality stocks, and monitor both macroeconomic indicators and global cues closely in the coming days.