Indian Equity Benchmarks Edge Higher Ahead of RBI Policy Decision

Market Update at 10:30 AM: Indian shares advanced on Wednesday, as investors anticipated dovish signals from the Reserve Bank of India's (RBI) upcoming policy decision. The market reaction comes amid concerns over U.S. tariffs and a hike in H-1B visa fees, even as expectations remain for the central bank to hold rates steady.

The Nifty 50 was up 0.21 per cent at 24,661.45, while the BSE Sensex added 0.18 per cent to 80,419.87, as of 9:34 a.m. IST. All major sectors logged gains, with broader Small-Cap and Mid-Cap indices rising 0.3 per cent and 0.5 per cent, respectively.

A potential rate cut would reduce borrowing costs, boost consumption, and improve corporate earnings, providing support to domestic equities. The central bank had held rates steady at its August meeting, following a surprise front-loaded 50-basis-point rate cut in June.

Auto stocks gained 0.6 per cent, led by a 1.5 per cent rise in Bajaj Auto, which reported a 9 per cent year-on-year increase in total sales in September. The pharma index climbed 1.1 per cent, with Lupin surging 3 per cent after receiving U.S. drug regulator approval for a drug to treat thrombosis and pulmonary embolism. The rate-sensitive realty index gained 1 per cent.

Among individual stocks, Pfizer rose 4 per cent, following a deal between its U.S.-listed parent Pfizer Inc. and former U.S. President Donald Trump, under which the company agreed to lower prescription drug prices in exchange for tariff relief.

Pre-Market Update at 7:45 AM: Equity benchmark indices are expected to open flat on Wednesday, October 1, as investors await the Reserve Bank of India’s (RBI) monetary policy outcome and track mixed global cues. At 7:13 AM, the GIFT Nifty was trading at 24,770, up by 5 points.

The RBI’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, is expected to keep the repo rate unchanged and maintain its current stance. India’s fiscal deficit stood at 38.1 per cent of the full-year target by the end of August, reaching Rs 5.98 lakh crore for April–August of FY 2025-26. For the full year, the deficit is projected at 4.4 per cent of GDP or Rs 15.69 lakh crore.

Foreign Institutional Investors (DII ">FIIs) continued their selling trend in September, with net outflows of Rs 35,301.36 crore. On Tuesday, September 30, FIIs sold equities worth Rs 2,327.09 crore. In contrast, Domestic Institutional Investors (DIIs) bought equities worth Rs 5,761.63 crore, extending their buying streak to 26 sessions.

On September 30, benchmark indices ended lower for the eighth straight session. The Nifty 50 slipped 23.8 points or 0.10 per cent to 24,611.10, while the Sensex dropped 97.32 points or 0.12 per cent to 80,267.62. Banking stocks supported the market, with Nifty Bank rising 0.32 per cent and Nifty PSU Bank gaining 1.84 per cent after RBI eased lending norms. The Nifty Metal index rose 1.16 per cent, while FMCG and Realty declined 0.43 per cent and 0.82 per cent respectively. Out of 11 sectoral indices, five closed higher. Midcap and Small-cap indices ended mixed.

US stocks closed higher on Tuesday despite concerns of a potential government shutdown. The Dow Jones closed at 46,397.89, up 81.82 points or 0.18 per cent. The S&P 500 gained 27.25 points or 0.41 per cent to 6,688.46, while the Nasdaq rose 68.86 points or 0.30 per cent to 22,660.01. All three indexes reported quarterly gains, with the Nasdaq marking a six-month winning streak.

The US faces the risk of a government shutdown after the Senate failed to pass a funding extension. President Donald Trump indicated efforts to reduce the federal workforce could intensify. Meanwhile, US consumer confidence fell to 94.2 in September, down 3.6 points, as job outlook concerns grew.

Asian markets traded mixed in early hours. Japan’s factory activity contracted at its sharpest pace in six months, with the S&P Global Manufacturing PMI dropping to 48.5 in September from 49.7 in August.

Gold prices held near record highs amid safe-haven demand. Spot gold rose 0.2 per cent to USD 3,861.22 per ounce. On MCX, gold futures were up 0.79 per cent at Rs 1,17,265 per 10 gm, after touching a record Rs 1,17,788 per 10 gm.

The US dollar index stood at 97.869, near a one-week low, after dipping to 97.633 overnight.

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Disclaimer: The article is for informational purposes only and not investment advice.