Indian stock markets are expected to open on a flat note today, August 6, 2025, as investors await the Reserve Bank of India's (RBI) monetary policy decision. The benchmark indices, the Sensex and Nifty 50, are likely to see a tepid start, mirroring weak cues from global markets.

RBI Policy in Focus

The primary driver influencing market sentiment is the RBI's Monetary Policy Committee (MPC) meeting, which concludes today. The announcement, led by Governor Sanjay Malhotra, is expected at 10:00 am today. A majority of economists anticipate the RBI to maintain the repo rate at its current level. The central bank is expected to adopt a "wait-and-watch" approach, carefully assessing the impact of previous rate cuts and monitoring global economic uncertainties.

However, some analysts do not rule out a surprise rate cut. State Bank of India, for instance, anticipates a 25 basis points (bps) repo rate cut, which they believe could boost credit growth, especially with the festive season approaching.

Market participants will be closely watching the RBI's commentary on several key aspects:

• Impact of US Tariffs: The recent imposition of a 25% tariff by the US on Indian goods has raised concerns about external risks to the Indian economy. Any statements from the RBI regarding this issue will be crucial in assessing potential future regulatory actions.
• Inflation and GDP Projections: Economists anticipate that the central bank will revise its projections for Consumer Price Index (CPI) inflation in the August policy.
• Commentary on Growth: Given the uncertainty surrounding tariffs and their potential impact on economic growth, the RBI Governor's commentary will be closely scrutinized.
• Liquidity Measures: Market participants are seeking clarity from the RBI regarding the desired level of surplus liquidity to be maintained in the banking system.

Global Cues and Market Sentiment

Asian markets are trading mixed, following overnight losses on Wall Street, which were influenced by concerns over tariffs. The US stock market ended lower on Tuesday as investors weighed the potential impact of these trade measures.

Gift Nifty was trading around 24,685, indicating a slightly negative start for Indian stock market indices.

Tuesday's Market Performance

On Tuesday, August 5, 2025, the Indian stock market ended lower, with both the Sensex and Nifty 50 closing down for the third time in the past four trading sessions. The Sensex declined 308.47 points, or 0.38%, to close at 80,710.25, while the Nifty 50 settled 73.20 points, or 0.30%, lower at 24,649.55.

Trading Strategy

Given the current market conditions, analysts recommend a stock-specific approach, focusing on sectors with limited volatility to external factors. Shrikant Chouhan, Head of Equity Research at Kotak Securities, suggests that level-based trading would be an ideal strategy for day traders, considering the non-directional movement of the market. He identifies 81,000 as an important resistance zone for the Sensex, with potential for a pullback up to 81,500-81,600 above this level. On the downside, 80,500-80,300 will serve as key support zones.