Indian shares are set to open higher on Friday, ahead of the Reserve Bank of India’s (RBI) monetary policy decision, in which the central bank is widely expected to cut interest rates to support slowing economic growth.
The Gift Nifty futures were trading at 23,717.5 as of 07:28 a.m. IST, indicating that the benchmark Nifty 50 will open above Thursday’s close of 23,603.35.
The Nifty 50 has risen about 0.5% so far this week but is down about 4.4% from the previous policy meeting on December 6, 2024, hurt by slowing growth and corporate earnings.
The RBI is widely expected to deliver its first rate cut since May 2020 on Friday, a week after India’s federal government cut personal income tax to boost consumption.
The rate decision is due at 10:00 a.m. IST in Mumbai.
“There are several compelling arguments in favour of a rate cut, such as sluggish economic growth as seen from the government’s advance estimates, while recent efforts to boost banking system liquidity also create a strong case for a rate cut,” said Dhiraj Relli, managing director and chief executive of HDFC Securities.
However, the policy decision remains “finely balanced” because of challenges such as above-target inflation, rising global trade uncertainties and a falling rupee, Relli added.
Indian shares buck global trade war fears to log best day in a month
The Indian rupee weakened to a record low on Thursday, weighed down by foreign selling and uncertainty about the U.S.-China trade war.
Foreign portfolio investors have offloaded Indian shares worth $9.3 billion in 2025 so far.
Other Asian markets traded flat on the day. U.S. stocks were mixed overnight, as investors sifted through earnings reports ahead of the key jobs report on Friday.
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