Indian shares fall on deepening global market rout; RBI cuts rates

The Nifty 50  fell 0.72% to 22,372.7 at 11:05 a.m. IST. The BSE Sensex (.BSESN), lost 0.58% to 73,791.9.

The RBI cut its key repo rate for the second consecutive time this year to combat additional headwinds from U.S. tariffs which are slowing growth.

“The rate cut makes borrowing cheaper for individuals and businesses and could boost spending and investment in the economy,” said Ajay Garg, chief executive of SMC Global Securities.

Benchmarks held on to their losses on the day as markets had already priced in a 25-basis-points rate cut, two analysts said.

“Market reaction may be muted in the near-term due to global volatility, but over the medium-term, the ‘accommodative’ stance, improving macro backdrop and bottoming earnings cycle could support a constructive outlook,” said Anil Rego, founder and fund manager at Right Horizons.

According to Deepak Agrawal of Kotak Mahindra Asset Management Company, “The change in stance indicates RBI will support growth amid global uncertainty.”

The RBI also moderated its growth forecast for the fiscal year 2026 by 20 basis points to 6.5% from the earlier 6.7%.

Meanwhile, U.S. President Donald Trump’s “reciprocal” tariffs on dozens of countries took effect on Wednesday, including a whopping 104% duties on Chinese goods, deepening the global trade war even as some nations prepared to negotiate.

Broad-based selling in Indian stocks persisted, with 12 of the 13 major sectors falling and both smallcap and midcap stocks losing 1.3% each.

IT stocks, which derive a significant portion of their revenue from the U.S., dropped 3% on recessionary fears, while the pharma index (.NIPHARM),  fell 1.8% after Trump signalled “major” tariffs on pharmaceutical imports.

Asian markets tanked, with the MSCI Asia ex-Japan (.MIAPJ0000PUS), dropping 2.4%. Japan’s Nikkei 225 (.N225), shed 4.2%.