Why Are Nifty and Sensex Flat as Investors Await RBI Policy Decision?

Mumbai, Aug 6 (NationPress) The Indian equity markets opened on a flat note on Wednesday as investors awaited the decision from the Reserve Bank of India (RBI) Monetary Policy Committee. The Sensex increased by 64 points, or 0.08 percent, reaching 80,774, while the Nifty gained 16 points, or 0.07 percent, climbing to 24,665.

However, broader market indices faced increased selling pressure. The Nifty midcap 100 index fell by 0.54 percent, and the Nifty smallcap 100 index dipped by 0.64 percent.

According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, "Today’s monetary policy decision is unlikely to have a substantial impact on the market. The predominant factor influencing market trends will be the actions and statements from US President Donald Trump."

Among the sectoral indices, the Nifty IT index was the biggest decliner, dropping 0.92 percent. Other sectors like Nifty FMCG and Nifty Realty witnessed losses of 0.26 percent and 0.82 percent, respectively, while the Nifty Bank managed a slight rise of 0.13 percent.

In the Nifty pack, Bharti Airtel led the gainers, followed by Kotak Mahindra Bank, SBI Life Insurance, Shriram Finance, and Trent. Conversely, Coal India emerged as the major underperformer, dropping 1.41 percent, alongside other significant losers such as Dr. Reddy’s Laboratories, Cipla, Hero MotoCorp, and Grasim Industries.

Vijayakumar further added, "The rhetoric and actions from US President Trump are likely to continue affecting markets in the short term. India's measured response to these provocations indicates that we are not inclined to yield to the unreasonable demands of the US administration, which may lead to temporary economic challenges, including reduced exports and slight impacts on our GDP growth. This could pose challenges for the market, given the current high valuations which leave room for corrections."

Experts suggest that robust domestic economic indicators and expectations of a 25 basis point rate cut from the RBI could provide some upward momentum for the market.

From a technical perspective, immediate support for the Nifty is identified around 24,500, with a stronger support zone near 24,400. A breach below these levels could trigger more selling pressure. On the upside, resistance is seen at 24,800, with a major barrier around 25,000. A decisive move above 25,000 is crucial for any potential trend reversal and renewed buying interest, as stated by Hardik Matalia from Choice Broking.

Overnight, the US markets closed lower, with the Dow Jones falling 0.14 percent, the Nasdaq Composite decreasing by 0.65 percent, and the S&P 500 dropping 0.49 percent.

In Asia, market performances were varied, with Japan’s Nikkei 225 increasing by 0.62 percent. Meanwhile, markets in China and Hong Kong traded positively, while South Korea’s Kospi edged down by 0.21 percent.

On Tuesday, foreign portfolio investors (FPIs) net sold Indian equities worth Rs 22 crore, while domestic institutional investors (DIIs) were net buyers, acquiring shares worth Rs 3,840 crore.