Opening Bell: Nifty 50, Sensex Fall Up to 0.69% Ahead of RBI MPC Outcome

Market Update at 09:30 AM: Nifty 50 and the Sensex declined in early trade on Wednesday as investors remained cautious ahead of the outcome of the Reserve Bank of India’s Monetary Policy Committee meeting.

As of 9:18 AM, the Sensex fell 414.72 points, or 0.57 per cent, to 72,653.09, while the Nifty 50 declined 157.60 points, or 0.69 per cent, to 22,618.50.

Titan Company, SBI Life Insurance Company, and Hindalco Industries were the Top Losers in the Nifty 50 index.

In the broader markets, the Nifty MidCap index declined 0.45 per cent, while the Nifty SmallCap index gained 0.1 per cent.

Among sectors, the Nifty Auto and Nifty Metal indices declined the most, while the Nifty Media and Nifty Pharma indices emerged as the Top Gainers.

Pre-Market Update at 7:40 AM: Indian equities are set for a mildly negative start on Wednesday after two consecutive sessions of recovery, with the Reserve Bank of India’s monetary policy decision emerging as the biggest domestic event of the week. The RBI Monetary Policy Committee is scheduled to announce its decision at 10 AM, which could trigger heightened volatility during the session.

At around 6:58 AM IST, GIFT Nifty was trading near 22,741, indicating a softer start for Indian equities. Against Tuesday’s Nifty 50 close of 22,776.10, GIFT Nifty was lower by around 35 points, or 0.15 per cent. The contract was also trading at a discount of nearly 54 points to the previous Nifty futures close. The indication points to a modestly negative opening rather than a sharp gap down, although price action could turn volatile ahead of the RBI policy announcement.

Wall Street ended firmly higher overnight. The S&P 500 gained 0.58 per cent to 7,818.95, while the Nasdaq Composite rose 0.45 per cent to 27,599.79 and the Dow Jones climbed 0.49 per cent to 51,521.04. The S&P 500 and Nasdaq registered record closing highs, supported by softer Treasury yields, stabilising crude prices and continued buying in AI-linked stocks.

Expectations of another U.S. Federal Reserve rate hike in October have also fallen sharply following weaker labour-market data. Markets now assign roughly a 20 per cent probability to an October increase, compared with more than 50 per cent a week earlier.

Asian markets were mixed in early Wednesday trade. At the 6:58 AM IST snapshot, Japan’s Nikkei 225 was down 0.12 per cent, while South Korea’s Kospi gained 0.44 per cent. Based on Tuesday’s respective closes of 70,683.98 and 6,941.39, the moves placed them around 70,600 and 6,972, respectively. Hang Seng futures indicated a broadly flat opening. Mainland Chinese markets remain closed for the Golden Week holiday and will reopen on October 8.

European markets ended higher on Tuesday. The FTSE 100 gained 0.4 per cent, supported by easing UK bond yields and softer crude prices, while the broader STOXX Europe 600 also advanced. Reliable closing levels for the DAX and CAC 40 were not available from current-source searches and have therefore not been included.

Crude oil has moved higher again after declining on Tuesday. Brent crude rose USD 0.93 to USD 101.51 per barrel, an increase of roughly 0.92 per cent, while WTI crude gained USD 0.82 to USD 90.25 per barrel, also around 0.92 per cent higher. Concerns over a developing Gulf of Mexico storm and renewed supply risks in West Asia supported prices.

A sustained Brent price above USD 100 remains negative for India’s inflation and current-account outlook. It can also pressure aviation, paints and other crude-linked sectors, while affecting marketing margins for oil marketing companies.

Spot gold was around USD 4,167 an ounce, while silver traded near USD 61.34 an ounce in the early Asian session. On MCX, the latest available quote showed gold at Rs 1,50,130 per 10 grams, up 0.55 per cent, while silver stood at Rs 2,27,365 per kg, up 0.57 per cent.

The Dollar Index stood near 101.94, remaining below its recent 18-month high. The rupee closed Tuesday at around Rs 96.42 per U.S. dollar, down roughly 0.1 per cent and at a two-month low, pressured by foreign equity outflows.

The U.S. 10-year Treasury yield eased to around 5.269 per cent from 5.310 per cent but remains historically elevated. High U.S. yields continue to narrow the relative yield advantage of Indian assets and remain a headwind for foreign portfolio flows.

Domestically, the Nifty 50 gained 220.35 points, or 0.98 per cent, to 22,776.10 on Tuesday, while the Sensex advanced 685.34 points, or 0.95 per cent, to 73,067.81. The Sensex traded between 72,384.83 and 73,067.81 and closed at its session high. The Nifty 50 also finished around its day’s high.

Foreign investors remained sellers. FIIs sold Rs 2,961.30 crore in the cash market on October 6, while DIIs bought Rs 5,088.92 crore, providing another layer of domestic support.

India VIX declined nearly 7.9 per cent to around 13.6, signalling some reduction in immediate volatility expectations after three consecutive sessions of increases. However, the RBI policy announcement could trigger renewed Intraday volatility.

The key domestic event today is the RBI Monetary Policy Committee decision at 10 AM. The repo rate currently stands at 5.25 per cent, with a 25 basis point increase to 5.50 per cent widely expected. Market pricing also indicates a smaller probability of a 50 basis point increase. Beyond the rate decision, commentary on inflation, liquidity conditions and the future rate path will be closely watched.

TCS will announce its Q2 FY27 results on October 8. Among companies scheduled to report today are smaller companies, including Alstone Textiles and Indrayani Biotech.

SEBI may revise CAS derivative settlement rules, with reports indicating that the regulator may suspend Closing Auction Session-based derivative settlement for at least a year and instead use the final 30-minute VWAP. The proposed change could reduce expiry-day distortions and may be positive or neutral for exchanges and derivatives participants.

The RBI policy decision remains the most important domestic trigger. While a 25 basis point hike is largely priced in, the RBI’s commentary on inflation, liquidity and the future rate path will be important for banks, NBFCs, Real Estate, autos and the rupee.

Easing U.S. yields could provide some relief to emerging-market equities, although elevated absolute yield levels remain a constraint for FII flows. Meanwhile, Brent crude moving above USD 101 due to renewed supply concerns remains negative for aviation, paints and other crude-sensitive industries and could add to India’s inflationary pressures.

The Tata Sons listing debate is also likely to remain in focus after differences surfaced within Tata Trusts over the restructuring and potential listing of Tata Sons following the RBI’s refusal to grant an exemption request. The development could lead to stock-specific attention across Tata group companies.

Among stocks in focus, Titan reported around 25 per cent year-on-year business growth in Q2 FY27, along with 78 net store additions. Mphasis secured a £35.4 million contract linked to Social Security Scotland, while JSW Cement commissioned a new 1 MTPA grinding unit in Rajasthan.

Utkarsh Small Finance Bank reported a 54.9 per cent year-on-year increase in Q2 disbursements to Rs 3,525 crore. Blue Dart Express signed an MoU with NCRTC to explore parcel movement through the Namo Bharat corridor.

CONCOR received an Rs 87.15 crore order for supplying 12 BLSS wagon rakes, while OM Power Transmission secured a Rs 69.19 crore letter of intent from GETCO.

With the RBI policy decision due at 10 AM, elevated crude prices, continued FII selling and mixed global cues, traders are likely to remain cautious despite the recent recovery in domestic benchmarks.

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

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