Sensex, Nifty Wobble as Markets Weigh Trump Tariff Threat, RBI Rate Call

Markets Open Lower as Trump Tariff Threat, RBI Decision Keep Investors Cautious.

Benchmark indices slipped in early trade on Wednesday, weighed down by renewed trade tensions with the US and uncertainty ahead of the Reserve Bank of India’s monetary policy decision.

By 9:40 AM, the BSE Sensex was down 65.70 points at 80,644.34, while the NSE Nifty50 dropped 28.40 points to 24,620.

Sentiment turned sour after US President Donald Trump threatened fresh tariffs on Indian imports—specifically targeting pharmaceuticals and semiconductors—while labelling India an “unfavourable” trade partner. The remarks added to broader risk-off sentiment already triggered by weak US economic data, including a disappointing ISM Services PMI and surprise job losses.

Prashanth Tapse, Senior VP – Research at Mehta Equities, said, “Markets are grappling with a triple whammy—Trump’s aggressive trade stance, Wall Street’s overnight losses, and RBI policy uncertainty.” With the central bank’s rate decision due at 10 AM, he noted that expectations are mixed. “Repo remains at 5.5%, inflation is easing, and GDP growth is sluggish at 6.5%. After June’s 50 bps cut, we expect a pause.”

Tapse also highlighted upcoming Q1 earnings from companies including Bajaj Auto, Divi’s Labs, Raymond, PVR Inox, and Trent as key drivers for stock-specific action. He flagged technical weakness in Aurobindo Pharma, Voltas, BSE, and Havells.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said Trump’s rhetoric could cast a longer shadow than the RBI’s decision. “India has responded with measured firmness and is unlikely to bow to unreasonable US demands. However, short-term pain is likely—exports may dip, GDP growth for FY26 could slip to 6.2%, and earnings may soften. In a richly valued market, some correction is healthy.”

He added that while the RBI’s stance will be watched, “the overriding market driver today is geopolitics.”