Sensex, Nifty Open Higher After 8 Losing Weeks; RBI in Focus

Sectors in Early Trade

Why It Matters: The RBI Rate Hike Is the Week's Big Event

The biggest domestic trigger this week is the Reserve Bank of India's policy decision on Wednesday. According to market experts, the RBI is widely expected to raise its policy rate by 25 basis points, and the move is largely priced in.

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Sensex, Nifty Open Higher After 8 Losing Weeks; RBI in Focus

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Market Holiday Seals 8th Straight Weekly Loss for Sensex, Nifty

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That explains why PSU banks led the early gains. Experts said banks could benefit from a rate hike, as higher floating lending rates may support their margins.

A rate hike is a significant shift. It signals that the central bank is prioritising inflation control at a time when high crude prices and global pressures are pushing up costs, as seen in recent fuel, LPG and jet fuel price increases.

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Signs of Stabilisation

Experts said the market could see a near-term rebound after eight weeks of declines. "Valuations have turned attractive, particularly for large-caps," they said, adding that the market may be better placed to handle current headwinds. Positive September auto sales also point to continued resilience in the domestic economy.

Crude offered some relief too. Brent traded nearly 1% lower at $101.27 a barrel, well below the $106-plus levels seen early last week.

The Tug of War Continues

In the previous session, FIIs sold ₹9,484 crore worth of equities, while DIIs bought ₹10,041 crore, a net domestic inflow of about ₹557 crore. Domestic institutions have now outbought foreign selling in back-to-back sessions.

Still, elevated crude prices, high US bond yields and continued FII selling remain key risks.

The Bottom Line

Monday's open offers relief after a bruising two months. But whether it becomes a real recovery may depend on Wednesday, when the RBI's decision will show how hard it plans to fight inflation, and how markets react.

With inputs from IANS.