Pre-Market Update: GIFT Nifty Signals Over 100-Point Gap-Up Ahead of RBI MPC Decision

Indian equity benchmarks, the Sensex and Nifty 50, are likely to open higher on Wednesday, August 5, with GIFT Nifty indicating a gap-up start ahead of the Reserve Bank of India's (RBI) monetary policy announcement. Positive cues from Asian markets and overnight gains on Wall Street are also expected to support sentiment.

As of 7:31 a.m., GIFT Nifty was trading around 24,723, indicating an opening premium of 144 points over the previous close of Nifty futures.

Investor focus will remain on the RBI's Monetary Policy Committee (MPC) decision, scheduled to be announced at 10:00 a.m. RBI Governor Sanjay Malhotra will unveil the policy outcome, followed by a press conference at noon. Economists broadly expect the central bank to maintain its current policy stance amid stable domestic macroeconomic conditions and lingering global uncertainties. However, market participants will closely monitor the RBI's commentary on inflation, liquidity and economic growth for future policy signals.

Global developments will also remain on investors' radar. Crude oil prices extended losses as optimism grew over progress towards reopening the Strait of Hormuz, easing concerns over supply disruptions. Brent crude traded near USD 83 per barrel, while West Texas Intermediate (WTI) hovered around USD 77 after declining sharply over the previous two sessions.

Developments surrounding the U.S.-Iran conflict also remain in focus. Qatar has reportedly drafted an interim proposal, while both Washington and Tehran have indicated progress in negotiations aimed at reopening the strategic shipping route. According to Bloomberg, U.S. President Donald Trump discussed regional de-escalation efforts with Qatar's Emir Sheikh Tamim bin Hamad Al Thani. Despite the diplomatic progress, uncertainty remains over Iran's nuclear programme and the broader geopolitical situation.

The June-quarter earnings season continues at full pace, with more than 150 companies scheduled to announce results on Wednesday. Key earnings to watch include Life Insurance Corporation of India (LIC), Trent, Hero MotoCorp, Britannia Industries, Emcure Pharmaceuticals and Reliance Power.

Gold prices edged higher as easing geopolitical concerns reduced inflation expectations and tempered expectations of further interest rate hikes by the U.S. Federal Reserve. Spot gold rose 0.5 per cent to around USD 4,076.47 per ounce, while silver gained 2.3 per cent to USD 59.51 per ounce.

Derivative positioning suggests traders remain cautious ahead of the RBI policy outcome. The Put-Call Ratio (PCR) for the August expiry stands at 0.81. Significant put open interest addition was witnessed at the 23,500 and 24,000 strike prices, with the highest concentration at 24,000. On the call side, fresh additions were seen at 24,500, while the highest open interest remained at the 24,600 strike.

From a technical perspective, Nifty 50 is expected to remain in a consolidation phase as long as it trades below the immediate hurdle of 24,744. Immediate support is placed in the 24,500-24,400 zone, with pivot support levels at 24,477, 24,412 and 24,306. Resistance is seen at 24,688, 24,753 and 24,858. A sustained move above 24,744 could revive bullish momentum and open the door for a rally towards the 25,000-25,150 zone, while a breach below the 24,500-24,400 support band could trigger further consolidation or profit booking.

Stock-specific action is expected to remain strong. Bharti Airtel will be in focus after reporting consolidated revenue of Rs 58,539 crore for the June quarter, up 5.7 per cent sequentially and ahead of market estimates. FSN E-Commerce Ventures, the parent of Nykaa, reported a more than threefold jump in net profit to Rs 79.7 crore. ONGC posted more than a twofold sequential rise in quarterly profit, supported by better gas realisations.

HDFC Bank will remain in focus as investors track its 32nd annual general meeting, proposed fund raising through Additional Tier-I, Tier-II and long-term bonds, and management commentary following the resignation of its former chairman. Bharti Hexacom reported a 23 per cent year-on-year rise in June-quarter net profit to Rs 482.4 crore, while Marico posted a 27 per cent increase in net profit to Rs 652 crore and revenue growth of 23 per cent to Rs 3,957 crore.

Among other earnings, Castrol India reported a 42.5 per cent year-on-year rise in net profit to Rs 347 crore, NHPC posted a 2.9 per cent increase in consolidated net profit to Rs 1,095.87 crore, while Deepak Nitrite reported a sharp jump in net profit to Rs 345 crore from Rs 112.2 crore a year ago on the back of 36.4 per cent revenue growth.

Banking and automobile stocks are also expected to remain active ahead of the RBI policy announcement, with investors tracking the repo rate decision, inflation outlook, GDP projections and liquidity commentary.

In the derivatives segment, LIC India remains under the F&O ban for August 5.

Institutional activity remained positive in the previous session. Foreign Institutional Investors (FIIs) were net buyers of Indian equities worth Rs 2,446.47 crore, while Domestic Institutional Investors (DIIs) were net sellers worth Rs 936.14 crore.

On Tuesday, Indian markets ended lower, snapping a four-session winning streak as investors turned cautious ahead of the RBI policy decision and geopolitical developments. Nifty 50 settled at 24,614.90, down 159.40 points or 0.64 per cent, while the Sensex declined 210.07 points to close at 78,428.96. Bank Nifty fell 0.58 per cent and India VIX rose around 2 per cent.

Overnight, Wall Street extended its rally for a second straight session. The S&P 500 climbed 1.8 per cent to a fresh record high above the 7,700 mark, while the Dow Jones Industrial Average surged more than 900 points to another record closing high. The gains were supported by strong corporate earnings and optimism surrounding progress in U.S.-Iran negotiations.

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