Indian stock markets opened higher on Wednesday, breaking a six-day losing streak, as investors eagerly awaited the Reserve Bank of India’s (RBI) monetary policy decision later in the day. The RBI Monetary Policy Committee decided to retain the repo rate. The benchmark Nifty 50 index opened at 25,065.80, up from its previous close of 25,013.15, while the Sensex started the day at 81,954.58, climbing from Tuesday’s close of 81,634.81. At 11:20 AM, the Sensex was 0.79 per cent higher at 82,281 points.

The positive opening follows gains in global markets and a tech-driven rally on Wall Street. Asian stocks climbed Wednesday, with Japan’s Nikkei index trading in positive territory, although China’s markets opened sharply lower.

At 9:30 am, top gainers on the NSE included Shriram Finance (2.85 per cent), BPCL (2.32 per cent), Tata Motors (2.28 per cent), Bajaj Finance (1.94 per cent), and Tech Mahindra (1.81 per cent). The losers were led by ONGC (-1.81 per cent), Britannia (-0.88 per cent), ITC (-0.79 per cent), HDFC Bank (-0.79 per cent), and Nestle India (-0.69 per cent).

Sagar Shinde, Consultant at Stoxkart, commented, “The Nifty broke a six-day losing streak with a notable uptick, with outperformance by Mid and small-cap stocks by almost 2 per cent each. The psychological impact of breaking a losing streak can be significant, emboldening traders who perceive it as a shift in market sentiment.”

Deepak Jasani, Head of Retail Research at HDFC Securities, noted, “Nifty broke a six-day losing streak and ended higher on Oct 08. Nifty is in the process of forming a double bottom around 24700. A decisive and sustainable upmove beyond 25000 could negate the near term weakness.”

Global markets also influenced investor sentiment. US stocks finished higher on Tuesday, with technology shares powering a rebound. The world’s largest technology companies drove stocks higher, with the Nasdaq Composite experiencing its best day in nearly three weeks.

Oil prices saw a sharp decline, with Brent crude falling below $78 per barrel. Rahul Kalantri, VP Commodities at Mehta Equities Ltd, stated, “Crude oil experienced significant price volatility and a sharp sell-off following reports that Lebanon-based Hezbollah is seeking a ceasefire with Israel, raising hopes of de-escalation in the Middle East.”

In the bullion market, gold and silver prices dropped ahead of the US Federal Reserve meeting minutes and inflation data. Kalantri added, “Both metals hit 3-week lows in international markets, trading near critical levels of $2,610 for gold and $30.00 per troy ounce for silver.”

Foreign Institutional Investors (FIIs) sold shares worth net ₹5729.60 crore on October 8, while Domestic Institutional Investors bought shares worth net ₹7000.68 crore, according to provisional figures.

Looking ahead, Vikas Jain, Head of Research at Reliance Securities, said, “NIFTY-50 has recovered the previous day loss and made a higher bottom at 24,800 levels which will be key to hold for an up move near to 25,500 levels.”

As the market awaits the RBI’s policy decision, traders are advised to exercise caution. Hardik Matalia, Derivative Analyst at Choice Broking, suggested, “Traders are advised to exercise caution, maintain strict stop-loss levels, and avoid holding long positions overnight to mitigate risks associated with market volatility.”

The market’s performance in the coming days will likely be influenced by the RBI’s policy stance, global cues, and upcoming US inflation data and corporate earnings reports.

Published on October 9, 2024