Nifty, Sensex open flat ahead of RBI policy decision; broader indices gain, sectoral trend mixed

NEW DELHI: Indian stock markets opened on a cautious note on Friday, as investors remained in a wait-and-watch mode ahead of the Reserve Bank of India’s key monetary policy announcement. The policy decision is scheduled to be announced at 10 AM.

The benchmark indices reflected this cautious mood. The Nifty 50 opened at 24,748.70, down just 2.20 points or 0.01 per cent. Similarly, the BSE Sensex also opened flat at 81,434.24, down 7.80 points or 0.01 per cent.

Experts believe that any decision on the policy rate could significantly influence the market sentiment, especially if there is a larger-than-expected rate cut.

Market experts are closely watching the RBI’s Monetary Policy Committee (MPC) decision, with expectations divided between a 25 basis points (bps) and a 50 bps rate cut. A 50 bps cut, they say, could give a strong boost to market sentiment and trigger a rally post the announcement.

In the broader market, indices showed a slightly positive tone. The Nifty 100 also opened flat in green, while the Nifty Midcap 100 and Nifty Smallcap 100 gained 0.33 per cent each. Volatility in the Indian markets declined, with the India VIX falling more than 4 per cent, suggesting reduced investor nervousness ahead of the RBI announcement.

Among sectoral indices on the NSE, the trend was mixed. Except for Nifty Private Bank, all other sectors opened in the green. Nifty Media shares gained 0.33 per cent, Nifty Metal rose by 0.36 per cent, and Nifty Auto increased 0.16 per cent. The Nifty IT index remained largely flat, up by 0.07 per cent.

Ajay Bagga, Banking and Market Expert, told ANI, “In India, markets are treading water, waiting for the 10 AM RBI MPC meeting outcome. We expect a 25 bps rate cut, though some analysts are calling for a 50 bps rate cut on the back of in control consumer inflation, subdued growth in credit offtake, good monsoon prospects which should keep inflation in check, and a falling US dollar which has provided relief to EM currencies and allowed a large cross-section of Central banks to cut rates this year. Markets will rally post the RBI announcement. The next big event will be the US May non-farm payrolls data, which will show some direction to the bond markets and will impact stock market sentiments.”

In other Asian markets, a mixed trend was observed. Japan’s Nikkei 225 gained 0.47 per cent, Singapore’s Straits Times rose 0.14 per cent, and Indonesia’s Jakarta Composite was up 0.63 per cent. Hong Kong’s Hang Seng index increased by 0.19 per cent.

However, the Taiwan Weighted index declined marginally by 0.08 per cent at the time of filing this report. (ANI)