Indian shares likely to open lower ahead of RBI rate decision

GIFT Nifty futures pointed to a softer start for Indian equities on Wednesday, ahead of an expected interest rate increase by the Reserve Bank of India. According to Business Recorder, the futures traded at 22,704.5 at 7:42 a.m. IST, below the benchmark Nifty 50's close of 22,776.1 on Tuesday. The RBI is widely expected to lift rates by 25 basis points, which would be its first hike since February 2023.

Investors will be watching Governor Sanjay Malhotra's remarks on inflation risks for hints about the future rate path. Goldman Sachs analysts said the policy committee could move away from its neutral stance, possibly toward tighter conditions. The Nifty 50 has fallen 7.5 per cent since the RBI's August 5 pause, weighed by higher oil prices, rising US bond yields and foreign outflows.

Oil prices also firmed, with Brent gaining roughly 1 per cent to $101.5 as storm risks to US output and Houthi attacks in Saudi Arabia outweighed added Middle East supply. On Wall Street, the S&P 500 and Nasdaq reached record highs overnight, while Asian markets were subdued.