Sensex, Nifty opening: Will stock market rise ahead of RBI MPC?

Stock markets are likely to open higher on Monday, October 5, after the Sensex and Nifty posted their eighth straight weekly decline, their longest losing streak in 25 years.

Easing concerns over aggressive US monetary tightening, a pullback in crude oil prices and improving global sentiment are supporting the market ahead of the Reserve Bank of India's monetary policy meeting, which begins today.

The GIFT Nifty was trading at 22,620, up 129 points or 0.57%, as of 8:22 am IST on Monday, indicating a positive start for the benchmark Nifty 50. The Nifty had closed at 22,421.95 on Thursday, while the Sensex also ended lower. Indian markets were closed on Friday for a public holiday.

Hitesh Tailor, Technical Research Analyst, at Choice Broking Private Limited, said, "Equities are likely to open sharply higher, with Gift Nifty at 22,648, up 157 points. Global cues are supportive, with Asian markets trading mostly positive after softer-than-expected US jobs data reduced expectations of an immediate Fed rate hike. The improved global risk appetite and stronger opening indication could provide some relief to domestic equities after the recent correction."

The RBI Monetary Policy Committee meeting begins on Monday and will remain a key focus for investors through the week. A Reuters poll showed the central bank could raise interest rates for the first time in four years, adding another layer of uncertainty for equities.

Market sentiment has improved after softer-than-expected US jobs data reduced expectations of a Federal Reserve rate hike later this month. This has eased some pressure on emerging-market assets and global risk appetite.

Crude oil prices are also providing some relief. Brent crude slipped 0.6% to $101.6 per barrel on Monday as higher Middle East exports and coordinated stock releases by Group of Seven nations eased near-term supply concerns.

Other Asian markets were also trading higher, with the MSCI Asia ex-Japan index gaining 0.2%.

However, the market is coming off a weak stretch. Both the Nifty 50 and Sensex declined for the eighth consecutive week last week, hit by heavy foreign selling, elevated crude prices and a sharp rise in global bond yields.

Foreign portfolio investors remained net sellers for the sixth straight session on Thursday, offloading shares worth Rs 9,484.22 crore, according to provisional NSE data. Domestic institutional investors bought equities worth Rs 10,041.84 crore.

Two traders said weaker US economic data has pushed the probability of an October Fed rate hike below 25%. However, they added that a sustained recovery in Indian equities would require a further easing in oil prices and a slowdown in foreign outflows.HDFC BANK, RBI POLICY IN FOCUS

Among individual stocks, HDFC Bank will remain in focus after the country's largest private lender appointed Anup Bagchi as its next CEO for a three-year term.

Bagchi, currently MD and CEO of ICICI Prudential Life Insurance, will become the first external candidate to lead HDFC Bank.

The appointment comes at a time when investors are also watching the RBI's policy stance closely, with the central bank's MPC meeting beginning today.NIFTY OUTLOOK

Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking, said the Nifty continues to show a downward bias after extending its losing streak to eight weeks.

“Nifty formed a sizable bearish candle with a long lower shadow highlighting intraday volatility. The index maintained lower high and a lower low signaling continuation of the downward bias,” Mukherjee said.

He said a sustained break below the April low of 22,182 could extend the decline towards 22,000 and the CY2025 low of 21,743.

However, the recent sharp fall has pushed technical indicators into oversold territory. Holding above 22,182, which also coincides with the 200-week EMA and a rising trendline, could trigger a pullback towards 22,750 and 23,000, he said.

Shrikant Chouhan, Head Equity Research, Kotak Securities, said that the market has now entered an oversold zone.

"Therefore, the possibility of a technical pullback from current levels cannot be ruled out. For the Nifty, 22,200–22,100 remains a key support zone, while 22,500–22,600 is the immediate resistance area. A sustained move above 22,600 could trigger a pullback towards 22,800–23,000. Conversely, a break below 22,100 could intensify selling pressure and drag the index towards 22,000–21,750 (Lows of March/April 2025)."

For now, the positive GIFT Nifty points to a stronger start, but investors will closely track the RBI policy meeting, crude oil prices, foreign fund flows and global bond yields for direction through the session.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends