The Indian stock markets experienced volatility on Friday morning as investors awaited the outcome of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting. Benchmark indices, including the Sensex and Nifty, traded lower despite opening on a positive note, reflecting cautious sentiment among investors.
Sensex and Nifty Open Higher but Lose Momentum
The BSE Sensex, comprising 30 blue-chip stocks, initially gained at the start of trading but failed to sustain its momentum, falling by 87.32 points to 77,970.84 in early trade. Similarly, the NSE Nifty declined by 32.6 points, settling at 23,570.75.
Among the biggest laggards in the 30-share Sensex pack were PowerGrid, ITC, State Bank of India, Nestle, HCL Tech, Tata Consultancy Services, Reliance Industries, and Asian Paints. The decline in these major stocks contributed to the market’s overall weakness.
However, Bharti Airtel stood out as a key performer, surging nearly 4% after the company reported a more than five-fold jump in consolidated net profit, reaching ₹16,134.6 crore. This growth was driven by the consolidation of its Indus Tower business and the positive impact of recent tariff hikes. Other notable gainers included Tata Steel, Zomato, UltraTech Cement, and Mahindra & Mahindra.
Market Sentiment Driven by RBI Policy Expectations
According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, “Today, market focus shifts to the RBI MPC meeting outcome.” The monetary policy decision, expected to be announced later in the day, has created uncertainty among investors.
This meeting is particularly significant as it marks the first policy decision under the leadership of newly appointed RBI Governor Sanjay Malhotra. The six-member MPC panel is widely expected to announce a 25-basis-point reduction in interest rates—the first cut in nearly five years. Such a move could have major implications for lending rates, business investments, and overall market sentiment.
Global Market Trends and Economic Indicators
Asian markets showed mixed trends, with Seoul and Tokyo trading lower, while Hong Kong remained in positive territory. The mixed performance in Asian stocks indicates that global investors are also awaiting key economic decisions and data releases before making significant moves.
Meanwhile, U.S. markets ended mostly higher on Thursday, offering some optimism to global investors. The positive sentiment in the U.S. markets was fueled by expectations of interest rate adjustments by the Federal Reserve and improving macroeconomic data.
In the commodities market, the global oil benchmark Brent crude climbed 0.54% to trade at $74.68 per barrel, reflecting continued volatility in energy prices.
Foreign Investors and Market Liquidity
Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,549.95 crore on Thursday, according to exchange data. The continuous selling by FIIs signals cautious investor sentiment, possibly due to global uncertainties and concerns about inflationary pressures.
The impact of foreign investment flows has been a key factor in shaping the direction of the Indian markets. If the RBI announces a rate cut, it could potentially attract renewed interest from foreign investors, boosting liquidity and stabilizing the markets.
Stock Market Performance on Thursday
The markets had already witnessed a decline on Thursday, with the Sensex dropping 213.12 points (0.27%) to close at 78,058.16. The Nifty also fell by 92.95 points (0.39%) to settle at 23,603.35.
As investors navigate market uncertainties, Top News Headlines and Economic News Updates continue to highlight the crucial role of policy decisions, global market trends, and corporate earnings in shaping the future of stock markets.
What Lies Ahead for Investors?
The RBI’s policy decision will play a crucial role in determining short-term market trends. If the central bank announces an interest rate cut, it may provide a boost to equity markets by improving liquidity and reducing borrowing costs. However, if the decision does not meet investor expectations, volatility may persist.
Additionally, global economic factors, including inflation trends, crude oil prices, and geopolitical developments, will continue to influence market movements. Investors are advised to stay informed and adopt a cautious approach in the coming weeks.
As the trading session progresses, market participants will closely monitor the RBI’s announcement, looking for cues that will set the tone for market direction in the days ahead.
