19 Mar 2025

Indian Markets to Open Cautiously Amid Geopolitical Concerns and Fed Decision Awaited

Indian equity benchmarks are expected to open cautiously on Wednesday as traders assess geopolitical tensions and await the Federal Reserve’s decision on interest rates. Investors will also monitor the Bank of Japan’s stance on interest rates.

Key Developments to Watch:

  • RBI, Bank of Mauritius Sign MoU for Rupee Trade: The Reserve Bank of India and the Bank of Mauritius have signed an MoU to facilitate cross-border transactions using the Indian Rupee and Mauritian Rupee.

  • India-Malaysia to Accelerate ASEAN FTA Review: India and Malaysia have agreed to expedite the review of the ASEAN-India Trade in Goods Agreement (AITIGA), aiming for a substantial conclusion by 2025.

  • India-New Zealand FTA Could Boost Trade Tenfold: Negotiations for a Free Trade Agreement (FTA) between India and New Zealand are ongoing, with Union Minister Piyush Goyal stating that the deal could increase bilateral trade tenfold in the next decade.

  • RBI to Conduct OMO Worth RS. 50000 Crore: The Reserve Bank of India has announced an open market operation (OMO) to purchase government securities worth RS. 50000 crore on March 25 to enhance liquidity in the financial system.

  • Sugar Stocks in Focus: The Indian Sugar Mills Association (ISMA) has assured stable sugar availability for the 2024-25 marketing season, easing concerns over supply shortages.

Global Market Overview:

  • US Markets Decline: Wall Street closed lower on Tuesday amid concerns over President Donald Trump’s trade policies and economic uncertainty despite positive economic data.
  • Asian Markets Trade Mixed: Geopolitical tensions escalated as Israeli airstrikes hit Gaza, leading to a mixed trend in Asian markets.

Domestic Market Performance:

On Tuesday, Indian equity markets witnessed strong gains, closing near the day's high. The BSE Sensex surged 1131.31 points (1.53%) to 75,301.26, while the Nifty 50 jumped 325.55 points (1.45%) to 22,834.30.

Key Economic Indicators:

  • India to Remain Fastest-Growing Economy: The OECD has projected India’s GDP growth at 6.4% in 2025 and 6.6% in 2026, maintaining its position as the fastest-growing major economy.
  • Rupee Gains Against US Dollar: The Indian Rupee appreciated for the third consecutive session on Tuesday, supported by strong domestic equity markets and a weaker US dollar.
  • India Resolves 28,818 Insolvency Cases: Union Minister Harsh Malhotra announced that 28,818 out of 40,943 insolvency cases filed under the IBC have been resolved before admission, involving RS. 10 lakh crore. The 2016 IBC reform has improved India’s global ranking in resolving insolvency and enhanced ease of doing business.

Investors will closely watch global developments and domestic economic indicators for market direction.