Analysts see limited upside unless the RBI triggers a positive surprise. Traders are advised to stay cautious amid global uncertainty.
The Nifty index closed below 24,700, as tariff uncertainty continued to weigh on investors’ sentiment. The Bank Nifty closed below 55,400, underperforming the headline index.
Indian equity markets are likely to open on a subdued note ahead of the crucial Reserve Bank of India (RBI) policy decision today. Meanwhile, US President Donald Trump reiterated his stance of raising tariffs on India in the next 24 hours.
RBI Policy Preview
India’s central bank is widely expected to hold the repo rate at 5.50%, but a minority of economists see room for a 25 bps rate cut due to cooling inflation and tepid growth. The governor’s commentary on liquidity stance, inflation outlook, GDP trajectory, and bond yield guidance will be keenly monitored.
Market Outlook
SEBI-registered analyst Pradeep Carpenter noted that the Nifty index was in a narrow consolidation zone between 24,550 and 24,650, with immediate resistance at 24,800–24,900. A breakdown below 24,550 could lead to a slide toward 24,450.
For the Bank Nifty, he said that it needs to sustain above 55,600 to retest the 56,150–56,250 levels. And that we may see volatility rise significantly post-RBI announcement.
Overall, he expects the markets to trade sideways with a bearish bias until the policy outcome is clear. A dovish tone or surprise rate cut can trigger short-covering in rate-sensitive sectors like banks, NBFCs, auto, and real estate.
Carpenter advised caution due to global uncertainty and dollar-crude pressure. Going ahead, the focus remains on stock-specific action, especially in banking, EV, and infrastructure-related names.
Analyst Dipak Takodara noted that the Nifty index continues to stay below its 20-day and 50-day moving averages, which means the short-term trend is still weak. He added that it is now stuck inside a sideways range and is repeatedly taking support near the 24,565–24,537 zone. However, on the upside, the area around 25,000–25,050 (where both the 20-day and 50-day moving averages are placed) continues to act as a strong hurdle. Unless the Nifty crosses above that zone, we cannot expect a strong recovery, according to Takodara.
Key Levels To Watch:
• Support: 24,565-24,537; 24,467–24,377
• Resistance: 24,917–24,882, 25,000-25,100
He also cautioned that if the Nifty breaks below 24,537, it may lead to a deeper fall toward 24,377 or even lower. Until then, he expects the index to continue to move sideways with a negative bias.
Analyst Saurab Jain identified immediate support for the Nifty near 24,500, which aligns with recent pullback lows. A breach below this level could open room towards 24,250, where buyers previously stepped in during late July.
On the upside, Nifty faces a ceiling around 24,800–24,850, which acted as a hurdle in the last two sessions. Beyond that, 25,000 remains a psychological barrier with multiple rejection points from recent attempts. He expects volatility to remain elevated until clarity emerges from the RBI’s stance on rate action. Markets are watching closely to see whether the recent liquidity measures are sustained or paused.
For the Bank Nifty, the index is currently hovering near a short-term support zone at 55,000. If this level fails to hold, the next cushion may lie around 54,500–54,200, which previously triggered a sharp recovery post-RBI’s last policy, according to Jain. On the upside, the resistance zone remains firmly placed between 55,800 and 56,250. This band has repeatedly halted rallies in the last few sessions and will be crucial for any sustained up-move.
Banks remain rate-sensitive, so expectations from the RBI remain a key short-term driver. However, institutional flows and trade-related sentiment may override technical levels if volatility spikes. Jain concluded that both indices are trading near critical inflection points and that a directional move may follow once clarity from the central bank and global macros emerges.
Analyst Arun Mantri noted that for the Nifty index, the bulls have found their last line of defense around 24,400-24,450, while on the upside there is potential for short covering if any positive developments emerge.
Foreign Institutional Investors (FIIs) are currently capitalizing on their short positions, with 92% of their holdings in index futures now on the short side. On the domestic front, a possible boost is likely to come from the RBI monetary policy, any potential positive announcement from US President Donald Trump or tariff relief measures.
According to Mantri, these three news triggers remain the only likely catalysts that could rescue the index in the short term. Until this happens, he advised traders to remain patient and prepared.
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