Sensex and Nifty open higher ahead of RBI Monetary Policy decision

The Indian stock markets opened in the green on 30 September, Tuesday, as investors awaited cues from the Reserve Bank of India’s (RBI) upcoming monetary policy meeting scheduled for 1 October.

At 9:20 a.m., the Sensex was trading 301 points higher, up 0.38 per cent at 80,666, while the Nifty 50 rose 93 points, or 0.38 per cent, to 24,728. Broad-based indices also recorded gains, with the Nifty Midcap 100 up 0.32 per cent and the Nifty Smallcap 100 rising 0.29 per cent.

Among individual stocks, Titan Company, Asian Paints, Cipla, and Hindalco were top gainers on the Nifty, while Tata Motors, Tech Mahindra, and Dr Reddy’s Labs lagged.

Sectoral indices

Nifty Consumer Durables led sectoral gains, climbing 0.59 per cent, followed by Nifty Metal (up 0.56 per cent) and Nifty Private Bank (up 0.43 per cent). All major sectoral indices were in positive territory except Nifty Media, which remained subdued.

Analysts noted that the Nifty 50, which had opened positively in the previous session, slipped below 24,650 and closed in the red for the eighth consecutive day, reflecting continued selling pressure. Technically, a sustained move above 24,800 could set the stage for a rally toward the 25,000 mark, while immediate support levels are at 24,530 and 24,400.

Overseas markets

Global markets presented mixed signals ahead of RBI’s decision. US indices ended higher on Monday, with the Nasdaq up 0.48 per cent, the S&P 500 gaining 0.26 per cent, and the Dow rising 0.15 per cent.

In Asia, China’s manufacturing activity contracted for a sixth consecutive month, though less sharply than expected, lifting Shanghai by 0.44 per cent and Shenzhen by 0.42 per cent. Japan’s Nikkei slipped 0.05 per cent and Hong Kong’s Hang Seng declined 0.12 per cent, while South Korea’s Kospi edged up 0.13 per cent.

Market flows

On Monday, foreign institutional investors (FIIs) sold equities worth Rs 2,832 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 3,846 crore.

RBI MPC Expectations:
Market participants are closely watching the RBI’s Monetary Policy Committee (MPC) for possible action on the repo rate. According to recent research by SBI, a 25 basis points (bps) rate cut is widely anticipated, described as “the best possible option” for the central bank. However, some experts, including Madan Sabnavis, Chief Economist at Bank of Baroda, believe the RBI may maintain the status quo in its bi-monthly policy review.

“While we do believe there is limited scope for any change in the repo rate in this policy, there is a market view that, given the current environment, a rate cut would be warranted,” Sabnavis said.

Past MPC decisions

The RBI has followed a rate-cutting trajectory earlier this year:

• February 2025: Repo rate lowered by 25 bps.

• April 2025: Further 25 bps reduction to 6 per cent.

• June 2025: A 50 bps jumbo cut brought the rate down to 5.50 per cent.

• August 2025: Repo rate maintained at 5.50 per cent, with the RBI signalling a neutral stance.

Investors are closely monitoring both domestic and global cues, particularly the RBI’s policy stance, to gauge the near-term direction of the market. A rate cut could provide renewed momentum for equities, while a hold may see markets consolidate amid ongoing selling pressure.

With PTI inputs