Equity benchmark indices opened lower on October 7, snapping a two-session winning run, as investors turned cautious ahead of the Reserve Bank of India’s (RBI) monetary policy decision.
At 9:34 AM, the Sensex was down 429.97 points, or 0.59 per cent, at 72,637.84, while the Nifty50 fell 157.05 points, or 0.69 per cent, to 22,619.05.
Selling was broad-based, with 1,689 stocks declining against 1,240 advancing, while 103 remained unchanged, at the time of writing.
Bajaj Finance, Bharti Airtel, Dr Reddy's Laboratories, Coal India, and Cipla were among the top Nifty gainers. Titan Company, Asian Paints, Hindalco, SBI Life Insurance, Bharat Electronics and JSW Steel were among the biggest laggards.
The Nifty Consumer Durables, Nifty Metal and Nifty Auto indices were among the top sectoral laggards, each falling more than 1 per cent. Rate-sensitive sectors, including banks, non-banking finance companies (NBFCs) and real estate, also traded significantly lower.
RBI Governor Sanjay Malhotra is set to announce the Monetary Policy Committee’s (MPC) rate decision at 10:00 AM. The key question for markets is whether the central bank will raise the repo rate or leave it unchanged.
A 25-basis-point hike would be the first increase in the repo rate since February 2023, when the MPC last raised the benchmark rate by 25 basis points.
The decision comes at a time when investors are tracking the impact of higher inflation, a weak rupee and global interest rates on the Indian economy. Banks, NBFCs and real estate stocks are likely to remain in focus as these sectors are more sensitive to changes in borrowing costs.
Investors will also look for the RBI’s comments on inflation, economic growth and its stance on future rate moves.
As investors wait for RBI Governor’s policy decision, attention is also turning to the US Federal Reserve’s next move on interest rates.
The Federal Open Market Committee (FOMC) is scheduled to meet on October 27-28, with the policy decision due on October 28. The Fed’s rate outlook remains important for Indian markets as changes in US interest rates can influence foreign fund flows, bond yields, the dollar and the rupee.
