The domestic stock market opened flat on Friday as investors awaited the Reserve Bank of India’s (RBI) monetary policy committee (MPC) decision on the repo rate.
Early buying in the IT and PSU banking sectors provided some support, but overall activity remained subdued ahead of the key announcement.
The RBI is widely expected to cut policy rates by 25 basis points in today’s monetary policy review, a move that markets have already priced in.
At 9:23 AM, the Sensex was down 82.43 points, or 0.10%, trading at 81,359.61. Meanwhile, the Nifty slipped 7.70 points, or 0.03%, to 24,743.20.
The Nifty Bank index edged up by 4.85 points, or 0.01%, to 55,765.70.
The Nifty Midcap 100 rose 146.25 points (0.25%) to 58,449.25, while the Nifty Smallcap 100 climbed 65.50 points (0.36%) to 18,498.10.
Analysts Focus On RBI’s Growth And Inflation Outlook
Analysts emphasised that the RBI’s commentary on growth and inflation projections for the fiscal year 2025-26 will play a crucial role in shaping market sentiment.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, explained that the market would respond positively if the inflation forecast falls below 4 per cent.
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On technical grounds, analysts expect the Nifty to find immediate support at 24,500, followed by 24,400 and 24,300.
Resistance is seen at 24,850, 24,900, and the psychologically important 25,000 level.
Mandar Bhojane, Equity Research Analyst at Choice Broking, cautioned, “A breach below 24,500 could trigger further selling pressure, while a breakout above 25,000 may open up room for fresh highs.”
Volatility And Institutional Activity
The India VIX, a gauge of market volatility, fell 4.21% to 15.08, indicating expectations of lower volatility in the near term.
However, analysts warned that the RBI’s policy tone and rate outlook could cause volatility to spike.
In terms of institutional flows, foreign institutional investors (FIIs) were net sellers, offloading equities worth Rs 208.47 crore on 5 June.
Conversely, domestic institutional investors (DIIs) remained firm buyers with net purchases totalling Rs 2,382.40 crore, helping to support the market.
Sectoral Movers And Global Markets
Among Sensex constituents, Bajaj Finserv, Tata Steel, IndusInd Bank, Eicher Motors, ITC, NTPC, and Titan were the top gainers.
On the other hand, Tata Motors, Bajaj Finance, ICICI Bank, HDFC Bank, and SBI registered losses.
Asian markets saw mixed trading on Friday. Hong Kong, China, and Bangkok indices fell, while Japan’s market traded in positive territory.
Meanwhile, in the US, the Dow Jones closed down 108 points (0.25%) at 42,319.74. The S&P 500 declined by 31.51 points (0.53%) to 5,939.30, and the Nasdaq fell 162.04 points (0.83%) to 19,298.45 in the previous session.
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