Sensex, Nifty rise ahead of RBI's monetary policy decision

The Indian equity benchmarks edged higher on Wednesday ahead of the Reserve Bank of India's monetary policy decision due later in the day. The Sensex rose as much as 320 points and Nifty 50 index was trading above its important psychological level of 25,000 led by gains in Bharti Airtel, Tata Motors, State Bank of India, ICICI Bank , Tata Consultancy Services, HCL Technologies and Tech Mahindra. However, the gains were capped owing to selling pressure in Reliance Industries, HDFC Bank, ITC, Larsen & Toubro and Kotak Mahindra Bank.

As of 9:21 am, the Sensex was up 143 points at 81,784 and Nifty 50 index advanced 45 points to 25,058.

The Reserve Bank of India is likely to keep repo rate unchanged at 6.5 per cent in the policy meeting on Wednesday, for tenth straight time since February 2023. More than 80 per cent of economists say no change is expected in the future, while few expect the central bank to shift its stance into neutral that might bring chances for rate cuts because of slowing economic growth and softer global interest rates.

A dozen economists polled by Reuters expect a cut of 25 basis points, and one is expecting the rate to be trimmed down to 6.15 per cent. The Nomura economists assign 55 per cent chances to a rate cut in October but admit it's a close call. Analysts say that recent US Federal Reserve’s  50 basis point rate cut may influence the RBI to begin cutting rates even before 2025 as was widely predicted.

Meanwhile, most of the Asian markets were trading higher with Japan's Nikkei rising 0.68 per cent, Australia's S&P ASX 200 index advancing 0.2 per cent and South Korea's KOSPI declining 0.61 per cent.

Mainland China stocks opened sharply lower Wednesday and were poised to snap a 10-day winning streak after officials failed to inspire confidence in stimulus plans intended to revive the economy.

The benchmark Shanghai Composite index fell 4.6 per cent while the blue-chip CSI300 Index dropped more than 5 per cent.

Back home, ten of 13 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty Healthcare index's 1.2 per cent gain. Nifty Auto, Media, IT, Pharma, PSU Bank and Realty indices also rose around 1 per cent each.

On the other hand, select metal, private bank and FMCG shares were facing selling pressure.

Mid- and small-cap shares were outperforming their larger peers as nifty Midcap 100 index rose 0.90 per cent and Nifty Smallcap 100 index advanced 0.96 per cent.

Bharat Petroleum was top Nifty gainer, the stock rose 2.25 per cent to Rs 345.60 after oil prices declined in international markets. Shriram Finance, Tech Mahindra, Tata Motors, Cipla, State Bank of India, Asian Paints, Bajaj Finance and Dr Reddy's Labs also rose between 1.2-2.2 per cent.

On the flipside, ONGC, HDFC Bank, Nestle India, ITC, JSW Steel, Grasim, Kotak Mahindra Bank and Hindalco were among the losers.

The overall market breadth was positive as 2,429 shares were advancing while 512 were declining on the BSE.