Share Markets End 8th Straight Session In Red, Sensex About 100 Points Down, Nifty Tests 24,600
The sentiment remained volatile in the market as investors exhibited caution ahead of the RBI's policy decision. Further, consistent foreign fund outflows remained a point of concern for traders.
The Indian stock markets marked their 8th consecutive session in red on Tuesday. The BSE Sensex closed below 80,300, clocking a hit of nearly 100 points and the NSE Nifty50 settled trading near 24,600, slipping marginally by more than 20 points.
Notably, both benchmarks opened today's session in green. The BSE Sensex rose more than 250 points ringing the opening bell near above 80,600 during early trade. The broader Nifty, started the session beyond the 24,700 mark, rising 64 points, around the same time.
On the 30-share Sensex, Adani Ports, UltraTech Cement, Tata Motors, BEL, and Bajaj Finance stood among the early gainers. On the other hand, the laggards included Bharti Airtel, ITC, Trent, Bajaj Finserv, and Titan.
In the broader markets, the Nifty Bank index stood out with gains of 0.32 per cent. However, the Nifty Microcap250 index slipped 0.39 per cent. Sectorally, the PSU Bank index dominated in green and climbed 1.84 per cent. Meanwhile, the Media index crashed 1.23 per cent.
The sentiment remained volatile in the market as investors exhibited caution ahead of the RBI's policy decision. Further, consistent foreign fund outflows remained a point of concern for traders. Foreign Institutional Investors (FIIs) dumped Indian equities worth Rs 2,831.59 crore on Monday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 3,845.87 crore, according to exchange data.
RBI MPC Drives Investor Sentiment
The central bank's, six-member Monetary Policy Committe (MPC), which is chaired by the Governor Sanjay Malhotra, is all set to announce its interest rate decision on Wednesday and this outcome comes at a time of heightened geopolitical uncertainty, especially after US tariff hike on Indian exports.
Previously, RBI had reduced the repo rate by 100 basis points (bps) in three separate cuts, starting from February in order to counter the slowing inflation, which is measured using the consumer price index (CPI).
In its August policy review, the central bank opted to maintain status quo as a way of gauging the global headwinds and their impact, including US tariffs, on India's growth as well as inflation dynamics.
What Do Analysts Say?
Analysts remain divided on whether the Reserve Bank of India (RBI) will extend its easing cycle in the upcoming October policy review. According to a report by Goldman Sachs, the Monetary Policy Committee (MPC) is likely to keep the repo rate steady at 5.50 per cent while maintaining a neutral stance. The investment bank expects the central bank to strike a dovish tone, stressing the importance of assessing growth conditions and allowing time for the transmission of earlier rate cuts.
Goldman Sachs’ baseline projection points to another 25-basis-point reduction in December, which would lower the repo rate to 5.25 per cent. This forecast hinges on a mix of factors, including a benign inflation outlook, expectations of a more accommodative policy path from the US Federal Reserve, and a weaker trajectory for the US dollar. The report also flagged a possible risk scenario in which the RBI could advance its next rate move. If the MPC concludes that trade-policy uncertainties are posing greater downside risks to growth, or that the inflationary impact of recent GST rate cuts is less pronounced than anticipated, the central bank could deliver a 25-basis-point cut as early as October.
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