All Eyes on RBI This Week

The Indian stock market remained bearish for the fifth consecutive week, the longest in two years,

marked by significant declines amid persistent global trade tensions and domestic uncertainties.

Sentiments remained subdued, driven mainly by heavy selling from Foreign Institutional Investors, weak corporate earnings, particularly in banking and IT, and concerns over India-US trade talks.

The S&P 500 and Nasdaq Composite hit new record highs last week, fueled by optimism over a U.S.-European Union trade deal that reduced tariffs to 15%, improving trade outlook and investor sentiment.

Crude oil prices fell after OPEC+ agreed to another output increase, stoking concerns about global oversupply just as the US-led trade war may be exacting a toll on economic growth.

Market players are eager to know whether the RBI will choose to continue frontloading policy support during the August monetary policy review by announcing a 25-basis point (bps) repo rate cut at the upcoming Monetary Policy Committee (MPC) meeting scheduled for August 4-6, or whether it will maintain the status quo after having already reduced the repo rate by 100 basis points earlier this year. The Reserve Bank of India's six-member MPC is also expected to retain its neutral policy stance while revising the inflation projection for FY26 downward.

Indian markets are poised to open marginally higher today. Bulls will try to defend the crucial support zone around 24500-25400 levels (multiple swing lows of May-June 25). 24200 is a vital long-term support (200-day EMA) for the markets.

The Reserve Bank of India’s monetary policy decision, auto monthly sales data, and major earnings releases will drive the markets this week.