Domestic benchmarks Sensex and Nifty opened lower on Friday amid mixed global cues and uncertainty around the Reserve Bank of India’s policy outcome. With robust economic growth on one side and a sliding rupee on the other, investors remain split on whether the central bank will opt for a rate cut.
At 9:16 am, the BSE Sensex fell 118.92 points, or 0.14 per cent, to 85,146.40 after losing nearly 187 points in early trade. The NSE Nifty50 dropped 31.65 points, or 0.12 per cent, to 26,002.10, after briefly touching a low of 25,985.35.
Among Sensex constituents, Reliance Industries (RIL) led losers, falling 0.68 per cent to Rs 1528. Axis Bank slipped 0.35 per cent, while Tata Steel, Titan, and Sun Pharma dropped 0.39 per cent, 0.28 per cent, and 0.28 per cent, respectively.
Wall Street ended mixed overnight, with two of the three major US indices closing in the green. The Dow Jones Industrial Average was down 0.06 per cent to 47,850.94, while the S&P 500 rose 0.11 per cent to 6,857.12. The tech-heavy Nasdaq Composite also edged up 0.22 per cent to finish at 23,505.14.
Asian markets traded mixed on Friday. At last check, Japan’s Nikkei 225 fell 1.10 per cent to 50,465.14, while South Korea’s KOSPI was up 0.71 per cent to 4,057.04. Hong Kong’s Hang Seng Index also declined 0.39 per cent to 25,835.63.
On Thursday, the Sensex rose 158.51 points, or 0.19 per cent, to close at 85,265.32, while the Nifty50 advanced 47.75 points, or 0.18 per cent, to settle at 26,033.75.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the market’s attention today will remain firmly on the monetary policy outcome. “More important than the rate action, which is very tricky in the context of low inflation, high growth and depreciating rupee, the market will be keen to know what the governor says about the emerging macro trends. RBI’s action on the liquidity front will be keenly watched,” he said
Vijayakumar said that if the RBI opts for a rate cut, it is likely to be the final one in the current easing cycle. He noted that such a move would weigh on banks by compressing net interest margins and constraining their ability to mobilise deposits. Conversely, a rate cut would favour rate-sensitive sectors such as automobiles and real estate. If the RBI holds rates steady, he expects banking stocks to rally.
“Rupee’s sharp recovery yesterday to 89.97 from the low of 90.42 is signalling some sort of stability in the currency market. RBI governor’s views on the rupee today will significantly influence the near-term direction of the currency,” Vijayakumar added.
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