Markets Settle Trading In Green As RBI MPC Begins, Sensex Ends Over 400 Points Higher
On the 30-share Sensex, Tata Steel, BEL, Adani Ports, TCS, and Tech M closed the session among gainers. On the other hand, the laggards included PowerGrid, HDFC Bank, ICICI Bank, and HUL.
The Indian markets ended the first trading session of this week on a positive note. The BSE Sensex settled for the day over 400 points higher and just above 81,000, while the NSE Nifty50 closed above 24,700 at 24,723, surging more than 150 points.
On the 30-share Sensex, Tata Steel, BEL, Adani Ports, TCS, and Tech M closed the session among gainers. On the other hand, the laggards included PowerGrid, HDFC Bank, ICICI Bank, and HUL.
In the broader markets, the Nifty Midcap Select dominated in green and closed 1.52 per cent higher. Sectorally, the Metal and Midsmall Financial Services led the gains and ended 2.48 per cent and 2.10 per cent higher respectively.
Vinod Nair, Head of Research, Geojit Investments, explained, "A weakening US Dollar, along with robust monthly auto sales and encouraging quarterly results from leading automakers, helped renew investor interest in these sectors. The Q1 earnings summary indicates that consumption-driven companies are benefiting from a rebound in volume demand. Meanwhile, rising unemployment and slower job creation in the US have reinforced expectations of a potential Fed rate cut. However, there still remains room for caution due to high US tariffs."
Notably, the domestic markets kicked off the trading session on a positive note Monday morning, with key benchmark indices inching higher. The Sensex rose by over 100 points to reach 80,724 in early trade, while the Nifty climbed 50 points to cross the 24,600 mark at 9:15 AM. Meanwhile, the GIFT Nifty was seen marginally up at 24,677 before market hours.
Across Asia, key indices displayed mixed cues. South Korea’s Kospi, Hong Kong’s Hang Seng, and China’s Shanghai Composite Index opened in the green, while Japan’s Nikkei 225 was trading in negative territory. In contrast, Wall Street ended Friday’s session on a weaker note, reflecting global investor caution. On the commodities front, international benchmark Brent crude slipped 0.23 per cent to $69.51 per barrel.
Back home, Foreign Institutional Investors (FIIs) continued to pare exposure, offloading equities worth Rs 3,366.40 crore on Friday, according to exchange data.
Also Read : Oil Slips As OPEC+ Confirms September Output Hike Amid US Economic Concerns
RBI’s August Policy Meet Begins Amid Global Trade Risks
All eyes are now on the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), which commenced its bi-monthly deliberations today. The three-day meeting will conclude on Wednesday, August 6, when the central bank is expected to announce its decision on interest rates and its broader monetary outlook.
The timing of this meeting is critical. The United States is poised to impose 25 per cent tariffs on Indian exports from August 7, raising fresh concerns about external shocks to India’s growth prospects. Economists argue that the central bank may act pre-emptively to counter this looming pressure.
Early Diwali Hopes Rise on Possible Rate Cut
Market analysts, including those from SBI Research, anticipate a 25-basis-point reduction in the repo rate during this policy cycle. Their forecast is rooted in moderating inflation, upcoming tariff challenges, and the opportunity to stimulate credit growth ahead of the festive season.
SBI’s analysis cited the August 2017 policy cut as a comparable scenario. The 25 bps reduction at the time reportedly led to an additional Rs 1,956 billion in credit disbursal by Diwali, with personal loans comprising nearly 30 per cent of that increase. If history is any indicator, lower borrowing costs now could invigorate sectors such as retail, auto, and housing, traditionally driven by festive demand.
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