Indian stock markets continued to trade lower on Friday after the Reserve Bank of India (RBI) elected to pause its cycle of interest rate cuts, a move that weighed on investor sentiment and coincided with notable declines in technology sector stocks. The benchmark BSE Sensex and NSE Nifty 50 both extended losses, reflecting caution among domestic and foreign participants following the central bank’s decision to hold the policy rate steady.

In its latest bi-monthly monetary policy review, the RBI’s Monetary Policy Committee (MPC) opted to keep the repo rate unchanged at 5.25 per cent, maintaining a neutral stance amid ongoing geopolitical uncertainties and stable inflation projections. This was the first policy meeting after the Union Budget for the financial year 2026-27, and came amid expectations of sustained economic growth and external headwinds.

Market reaction was immediate as the Nifty IT index led sectoral declines, pressured by weak global cues and selling in major technology names. The broader 16-sector market saw widespread losses, with small- and mid-cap indices underperforming frontline stocks. Analysts linked the weakness to a global risk-off environment triggered by selloffs in technology stocks in the United States and a cautious outlook on corporate earnings.

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According to exchange data, foreign institutional investors continued to trim holdings, exacerbating the downward move. Domestic strategists noted that while the RBI’s status-quo decision was largely anticipated, it failed to buoy market sentiment as expectations for further monetary easing receded. A combination of weak overseas markets and sustained foreign outflows contributed to the pressure on Dalal Street.

Despite the broad weakness, some pockets of strength emerged, with select financial and defensive stocks posting gains amid the wider decline. However, IT heavyweights such as Tata Consultancy Services, Infosys, and Tech Mahindra were among the major laggards, reflecting the sector’s sensitivity to global growth concerns and currency volatility.

The RBI’s policy stance, balancing inflation containment with growth support, underscores the challenges facing India’s markets as global economic conditions evolve. Investors are now watching corporate earnings, foreign fund flows, and macroeconomic data for clues on the next directional move in Indian equities.

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