Indian equity benchmarks opened on a positive note on June 5, with the BSE Sensex jumping 269 points and the NSE Nifty hovering near the 23,500 mark. The rally comes ahead of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) decision scheduled later in the day.
Market Performance
The 30-share BSE Sensex climbed 269 points to open at 77,345.62, while the broader Nifty50 advanced 78 points to 23,498.90. The positive start was driven by strong buying in banking, IT, and auto stocks.
Among the Sensex pack, top gainers included Mahindra & Mahindra, Tata Motors, ICICI Bank, HDFC Bank, and Infosys. On the other hand, Reliance Industries, Nestle India, and HUL traded with minor losses.
Sectoral Trends
Sectorally, the BSE Bankex rose 0.5%, while the BSE IT index gained 0.4%. The BSE Auto index also traded higher by 0.3%. In contrast, the BSE Energy index slipped marginally.
According to market analysts, the uptrend was supported by positive global cues and expectations of a status quo in the RBI's monetary policy. The MPC is widely expected to maintain the repo rate at 6.5% for the ninth consecutive time, focusing on inflation control.
Expert Views
Vinod Nair, Head of Research at Geojit Financial Services, said, "Markets are optimistic ahead of the RBI policy outcome. The expectation of a status quo on rates and a dovish stance is driving the sentiment. However, the focus will be on the commentary regarding inflation and growth."
Another analyst from Motilal Oswal Financial Services added, "The RBI's decision and its forward guidance will set the tone for the near-term market direction. Any hawkish surprise could lead to profit-booking."
Broader Market
The broader market also traded higher, with the BSE Midcap index gaining 0.4% and the BSE Smallcap index rising 0.5%. The market breadth was positive, with 1,674 stocks advancing against 1,123 declining on the BSE.
Foreign institutional investors (FIIs) were net sellers in the previous session, offloading shares worth Rs 1,234 crore, while domestic institutional investors (DIIs) bought shares worth Rs 1,567 crore, providing support to the market.
Global Cues
Asian markets traded mixed on Wednesday, with Japan's Nikkei 225 rising 0.6% and China's Shanghai Composite gaining 0.3%, while Hong Kong's Hang Seng index fell 0.2%. Overnight, US markets ended higher, with the Dow Jones gaining 0.4% and the S&P 500 adding 0.3%.
The dollar index was steady near 104.5, while the 10-year US Treasury yield eased to 4.28%. Crude oil prices edged lower, with Brent crude falling 0.3% to $81.50 per barrel.
Outlook
Market participants remain cautious ahead of the RBI's policy announcement. The MPC decision is expected at 10:00 AM, followed by the governor's press conference at 12:00 PM. Any unexpected move or hawkish stance could trigger volatility in the afternoon session.
Technically, the Nifty has immediate support at 23,400 and resistance at 23,600. A breakout above 23,600 could lead to further upside towards 23,800 levels.
