Indian equity benchmarks ended marginally higher on Friday after a volatile trading session, as investors remained cautious ahead of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) outcome due next week. The BSE Sensex rose 0.12% to close at 72,924.50, while the NSE Nifty gained 0.15% to settle at 22,102.30.
Market Performance
The trading day began on a positive note, but soon turned choppy as participants booked profits at higher levels. However, buying interest in select heavyweight stocks helped the indices recover from the day's lows. The broader markets outperformed the benchmarks, with the BSE Midcap index rising 0.45% and the BSE Smallcap index adding 0.60%.
Sectoral Trends
Among sectoral indices, the Nifty IT index was the top gainer, surging 1.2% on the back of strong global cues. The Nifty Pharma and Nifty Auto indices also closed in the green, rising 0.8% and 0.5%, respectively. On the other hand, the Nifty PSU Bank index fell 1.1%, dragged down by profit booking in state-owned lenders.
Key Movers
In the Sensex pack, the top gainers included Infosys, HCL Technologies, and Tech Mahindra, which rose between 1.5% and 2.2%. Among the losers, Power Grid Corporation, NTPC, and State Bank of India declined by 1.3% to 1.7%.
RBI MPC Meeting in Focus
Market participants are now keenly awaiting the RBI MPC's decision, scheduled to be announced on June 8. The central bank is widely expected to keep the repo rate unchanged at 6.50% for the eighth consecutive meeting, as inflation remains above the target level. However, any hawkish commentary on inflation or liquidity management could influence market sentiment.
According to analysts, the market has already factored in a status quo on rates, but the tone of the MPC statement will be crucial. A dovish stance could boost bond markets and rate-sensitive sectors, while a hawkish outlook might trigger further volatility.
Global Cues
Globally, Asian markets ended mixed, with Japan's Nikkei rising 0.7% and China's Shanghai Composite falling 0.3%. European indices traded in the green in early deals, supported by gains in technology stocks. The US dollar index remained steady near 104.50, while crude oil prices hovered around $78 per barrel.
Foreign portfolio investors (FPIs) were net sellers in the Indian equity market on Thursday, offloading shares worth Rs 1,200 crore. Domestic institutional investors (DIIs) bought shares worth Rs 800 crore, providing some support to the market.
Outlook
Analysts expect the market to remain range-bound until the RBI MPC outcome, with the Nifty likely to find support at 21,800 and resistance at 22,300. A decisive breakout above 22,300 could trigger a fresh rally, while a fall below 21,800 might lead to further correction.
Investors are advised to adopt a cautious approach and focus on quality stocks with strong fundamentals. Sectors like IT, pharma, and auto are likely to outperform in the near term, while banking and PSU stocks may remain under pressure.
