Sensex, Nifty Extend Rebound as FII Selling Halves; RBI Tomorrow

Key Highlights

• Second day up: Nifty opened 47.50 points higher at 22,603.25; Sensex rose 125.58 points to 72,508.05.
• Private banks lead: Nifty Private Bank gained 0.75%; autos fell 0.4%.
• FII selling eases: Foreign investors sold ₹4,699 crore on Monday, about half of Thursday's ₹9,484 crore.
• DIIs ahead again: Domestic institutions bought ₹5,181 crore, outpacing FII selling for a third straight session.
• Big day ahead: The RBI policy decision and GST Council meeting are both due on Wednesday.

Indian markets extended their recovery on Tuesday, opening higher on positive global cues and buying in private bank stocks. Nifty opened at 22,603.25, up 47.50 points or 0.21%, while Sensex began at 72,508.05, up 125.58 points or 0.17%.

Based on these figures, Nifty closed Monday around 22,556, up roughly 134 points from last Thursday's close of 22,421.95, marking a modest two-session rebound after eight straight losing weeks.

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Why It Matters: The Selling Pressure Is Easing

The most encouraging signal is in the flows. FIIs sold ₹4,699 crore on Monday, roughly half of the ₹9,484 crore they sold on Thursday. Meanwhile, DIIs bought ₹5,181 crore.

That marks the third consecutive session in which domestic institutions bought more than foreign investors sold:

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Session	FII (net)	DII (net)
Wednesday, Sept 30	−₹10,148 cr	+₹11,271 cr
Thursday, Oct 1	−₹9,484 cr	+₹10,041 cr
Monday, Oct 5	−₹4,699 cr	+₹5,181 cr

Even so, analysts warned that the market could stay in "sell on rally" mode, as elevated US bond yields are likely to keep FIIs selling. A sustained rally, they said, would need a sharp fall in crude prices, for which there is no clear sign yet.

Key Levels

	Level
Near-term targets	23,100–23,220
Intermediate hurdle	22,800
Key band to cross	22,555–22,615
Downside support	~22,050

Failure to move above the 22,555–22,615 band could signal further consolidation.

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Global Cues

Asian shares traded higher after a technology-led rally pushed the Nasdaq to a fresh record high.

What to Watch: Wednesday

Wednesday brings two major events. The RBI is widely expected to raise its policy rate by 25 basis points, and the GST Council meets to consider process reforms aimed at simplifying compliance. Together, they could set the market's direction for the rest of the week.

The Bottom Line

The market's two-day bounce is backed by easing foreign selling and steady domestic buying. But with crude still high and a key RBI decision tomorrow, analysts see this as a cautious recovery, not yet a turnaround.

With inputs from IANS.