Sensex jumps nearly 500 points, Nifty above 24,600; IndiGo up 3%

Dalal Street opened higher on Wednesday as investors awaited the Reserve Bank of India's monetary policy decision, with markets widely expecting the central bank to keep interest rates unchanged while closely tracking its commentary on inflation and growth.

In Short

• Markets opened higher ahead of RBI policy announcement
• RBI expected to keep repo rate unchanged with hawkish tone
• Most sectors opened positive, Realty led gains at 2.17%

Benchmark indices opened on a positive note on Wednesday ahead of the Reserve Bank of India's monetary policy announcement, with the Sensex climbing over 400 points while the Nifty traded marginally higher as investors bet on a status quo in interest rates.

At 9:26 am, the BSE Sensex was up 403.11 points, or 0.51%, at 78,832.06, while the NSE Nifty50 gained 6.25 points, or 0.03%, to trade at 24,621.15. The divergence between the two benchmark indices persisted following the introduction of the new Closing Auction Session (CAS) for stocks in the futures and options segment earlier this week.

The Reserve Bank of India's Monetary Policy Committee (MPC) is scheduled to announce its policy decision at 10 am. A Reuters poll showed the central bank is widely expected to leave the repo rate unchanged, with Governor Sanjay Malhotra likely to maintain a slightly hawkish tone amid inflation risks stemming from volatile crude oil prices and a weaker-than-normal monsoon.

Market participants will closely watch the RBI's commentary on inflation, liquidity and growth for cues on the future policy path.

Most sectors opened in the green, with 12 of the 16 sectoral indices advancing. Nifty Realty emerged as the top performer, rising 2.17%, followed by Nifty Auto and Nifty PSU Bank, both up 0.84%. Nifty Metal gained 0.39%, while Financial Services Ex-Bank rose 0.40%. On the other hand, Nifty Pharma fell 0.79%, Healthcare slipped 0.93% and FMCG declined 0.50%.

The broader market also remained positive. The Nifty Smallcap 100 index gained 0.72%, while the Nifty Midcap 100 edged up 0.17%. India VIX fell over 3%, indicating easing volatility.

Among Sensex constituents, IndiGo surged 2.29%, Mahindra & Mahindra gained 2.12%, Bajaj Finserv advanced 1.84%, Trent rose 1.38%, Larsen & Toubro climbed 1.36% and NTPC added 1.18%. Kotak Mahindra Bank gained 1.01%, while Tech Mahindra, HCLTech and Infosys also traded in positive territory. On the downside, Sun Pharma declined 1.22%, TCS slipped 0.44%, Titan lost 0.31% and HDFC Bank edged 0.16% lower.

Global cues remained supportive as Brent crude slipped another 1.16% to $78.44 a barrel after sharp declines over the previous two sessions, easing concerns over imported inflation. WTI crude also fell 1.50% to $74.63 per barrel amid expectations of progress in efforts to end the US-Iran conflict and reopen the Strait of Hormuz.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the combination of lower crude oil prices, record highs on Wall Street and sustained foreign investor buying is creating a favourable backdrop for Indian equities.

"The sharp dip in Brent crude to below $80 and record closing in the US markets augur well for the Indian market today. The focus of the market today will be the monetary policy. The central bank is almost certain to hold the rates in today's policy since any rate hike now will impact the ongoing growth momentum in the economy. The market will be focused more on the central bank's stance and its commentary on managing the emerging challenges," he said.

Vijayakumar added that resilient economic growth, improving corporate earnings and foreign institutional investors turning net buyers for the sixth consecutive session have strengthened market sentiment.

"The growth resilience in the economy, improving corporate earnings growth and FIIs turning buyers for the sixth day in a row are positives from the market perspective. It appears that the market is poised for a breakout on the upside," he said.

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