Stock markets continue to trade lower after RBI pauses rate cuts; IT firms drop

Mumbai: Stock market benchmark indices Sensex and Nifty continued to trade lower on Friday after the RBI decided to pause on the policy rate front, with IT heavyweights facing selling pressure amid weak trend in the US equities.

Fresh foreign fund outflows also dented investors' sentiment.

Extending its previous day's decline, the 30-share BSE Sensex further edged lower by 368.37 points to 82,945.56 in morning trade. The 50-share NSE Nifty dropped 146.7 points to 25,496.10.

After a 25 basis point rate cut in December, the RBI on Friday decided to pause on the policy rate front amid geopolitical uncertainties.

This is the first monetary policy review after Finance Minister Nirmala Sitharaman announced the Budget for financial year 2026-27.

Announcing the sixth and final bi-monthly monetary policy for the current fiscal year, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has decided to retain short-term lending rate or repo rate at 5.25 per cent with a neutral stance.

"RBI's monetary policy came exactly on expected lines with no change in rates, and stance kept unchanged at neutral," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

From the Sensex firms, Tata Consultancy Services, Tech Mahindra, Trent, State Bank of India, Bharat Electronics, Tata Steel, Asian Paints and Infosys were among the major laggards.

ITC, Bajaj Finance, Kotak Mahindra Bank and Power Grid were among the gainers.

In Asian markets, South Korea's Kospi traded nearly 3 per cent lower and Hong Kong's Hang Seng index declined over 1 per cent. while Japan's Nikkei 225 index and Shanghai's SSE Composite index quoted higher.

US markets ended lower on Thursday. The Nasdaq Composite index tumbled 1.59 per cent, S&P 500 declined 1.23 per cent, and Dow Jones Industrial Average dropped 1.20 per cent.

"Global equity markets are trading with a pronounced risk-off bias following sharp losses in the overnight US session. Weakness in global technology stocks and commodities continues to weigh on sentiment, with selling pressure extending into Asian markets," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

The ongoing correction in global technology names reflects a combination of stretched valuations, rising AI-related cost concerns, and muted investor response to recent big-tech earnings and outlooks, he added.

Foreign institutional investors offloaded equities worth Rs 2,150.51 crore on Thursday, according to exchange data.

Brent crude, the global oil benchmark, climbed 0.44 per cent to USD 67.92 per barrel.

On Thursday, the Sensex dropped 503.76 points, or 0.60 per cent, to settle at 83,313.93. The Nifty declined 133.20 points or 0.52 per cent to end at 25,642.80.