Sensex surges 600 points ahead of RBI policy decision on 5 August
Synopsis
Indian markets opened sharply higher on 5 August as traders positioned ahead of the RBI's rate decision — widely expected to be a hold. With FIIs buying for six straight sessions, crude below $80, and US markets at record highs, analysts say the setup points to an upside breakout. The real question is whether the RBI's tone turns dovish enough to sustain it.
Key Takeaways
Sensex opened 600 points higher at 79,055 on 5 August , gaining nearly 1 per cent in early trade.
Nifty50 opened 54 points up at 24,669 .
Nifty Realty , Nifty Auto , Nifty PSU Bank , and Nifty Oil & Gas surged up to 2 per cent ; healthcare and pharma stocks declined up to 1 per cent .
Brent crude fell to around $78 per barrel ; WTI dropped to $74.24 per barrel .
FIIs have been net buyers for six consecutive sessions , supporting bullish momentum.
RBI is widely expected to hold rates steady, with analysts flagging the policy tone as the key market trigger for the day.
The BSE Sensex opened 600 points higher at 79,055 on Wednesday, 5 August, as domestic equity markets rallied ahead of the Reserve Bank of India (RBI) monetary policy announcement. The Nifty50 also gained, opening 54 points up at 24,669, with the headline index climbing nearly 1 per cent in early trade. Positive global cues and a sharp fall in crude oil prices added to the bullish sentiment.
Sector-wise Performance
Gains were broad-based across cyclical sectors. Nifty Realty, Nifty Auto, Nifty PSU Bank, and Nifty Oil & Gas each surged up to 2 per cent in early deals. Nifty Metal, Nifty Cement, and Nifty Chemicals also edged higher, reflecting broad risk-on appetite.
However, defensive sectors faced selling pressure. Nifty Healthcare, Nifty Pharma, Nifty FMCG, and Nifty Private Bank declined up to nearly 1 per cent. Among the top Nifty laggards were Apollo Hospitals, Sun Pharma, Cipla, Dr Reddy's Laboratories, SBI Life, Nestle India, ITC, and Tata Consultancy Services (TCS).
What the RBI Is Expected to Do
Market analysts broadly expect the RBI to hold interest rates steady at its policy meeting on 5 August. 'The central bank is almost certain to hold the rates in today's policy since any rate hike now will impact the ongoing growth momentum in the economy,' analysts noted. The rate-hold expectation has itself been a tailwind for rate-sensitive sectors such as realty and auto.
Global Cues and Crude Oil
Brent crude — the international oil benchmark — fell 1.61 per cent to trade around $78 per barrel, while US West Texas Intermediate (WTI) crude declined approximately 2 per cent to $74.24 per barrel. A dip in crude below the $80 mark is a positive for India, a major oil importer, as it eases the current account deficit and inflationary pressure. US markets also recorded a record closing session overnight, lending further confidence to Asian and Indian traders.
Market Outlook
Analysts pointed to a confluence of supportive factors: resilient economic growth, improving corporate earnings, and Foreign Institutional Investors (FIIs) turning net buyers for the sixth consecutive session. Experts suggested the market appears poised for an upside breakout, contingent on the RBI's tone and forward guidance. Any dovish signal from the central bank could accelerate the rally beyond the opening gains.
Point of View
Which means the real risk is in the central bank's forward guidance: any hawkish signal on inflation could quickly unwind the rally. The rotation into realty and PSU banks, both rate-sensitive, suggests traders are also betting on an eventual easing cycle. But with crude still volatile and the US Fed's own trajectory uncertain, the RBI's room to pivot remains constrained — and the market may be getting ahead of itself.
NationPress
5 Aug 2026
Frequently Asked Questions
Why did the Sensex open higher on 5 August?
The Sensex opened 600 points higher on 5 August ahead of the RBI's monetary policy announcement, buoyed by positive global cues, a sharp fall in crude oil prices, and six consecutive sessions of FII buying. Markets are widely pricing in a rate hold by the RBI.
What is the RBI expected to decide on 5 August?
The RBI is widely expected to hold interest rates steady at its August policy meeting. Analysts noted that a rate hike at this stage could hurt the ongoing growth momentum in the economy.
Which sectors gained and which fell in early trade?
Realty, auto, PSU banking, and oil and gas stocks gained up to 2 per cent, while healthcare, pharma, FMCG, and private banking shares declined up to nearly 1 per cent. Apollo Hospitals, Sun Pharma, Cipla, and TCS were among the top Nifty losers.
How did crude oil prices move on 5 August?
Brent crude fell 1.61 per cent to around $78 per barrel, while WTI crude dropped about 2 per cent to $74.24 per barrel. The dip below $80 is seen as a positive for India, easing import costs and inflation pressure.
What is the significance of FIIs buying for six consecutive sessions?
Foreign Institutional Investors turning net buyers for six straight sessions signals improving global confidence in Indian equities. Analysts consider this a key positive, as sustained FII inflows typically support broader market momentum and rupee stability.
