The Indian stock market opened sharply in the positive on Wednesday, gaining ground after Tuesday’s sell-off. Both India’s benchmark Nifty 50 and Sensex started in the green, powered by initial buying momentum in most of the major sectors. The broader market joined in this positivity, cheering the news, as the entire stock market rose in this first hour of trading.
At 10:04 AM IST, the Nifty 50 index was at about 24,586.8, up about 44.35 points or 0.18% from Tuesday’s close. The S&P BSE Sensex also saw gains, trading at about 80,906.64, higher by roughly 169.13 points or 0.21%.
Another huge domestic event driving market sentiment today is the start of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting. This three-day conclave, chaired by Sanjay Malhotra, RBI Governor, started today, with its outcome eagerly awaited on first announced, Friday, 6th June. Market prognosticators are in a tizzy about possible interest rate cuts. After two back-to-back repo rate cuts (25 basis points each in February and April, with the rate now at 6%), most economists and news stories from large financial houses such as SBI expect another cut of 25 to 50 basis points in the repo rate at this meeting. This optimism is supported by persistently decreasing retail inflation, which moderated to 3.16% in April, and strong Q4 FY25 GDP growth of 7.4%, bringing full-year growth to 6.5%. Another reduction in the policy rate might help turn the credit cycle and provide broader economic support.
In morning trade, a clear W-shaped recovery move had taken place across multiple sectors. The Nifty Auto index was higher by about 0.6% with only the Nifty Pharma index, up about 0.47% close behind in terms of performance amongst the sectors. Buying interest PSU Bank stocks played a role in creating the positive sentiment. This is a big reversal from yesterday’s rout in which Financial Services and Information Technology sectors led the way down. Among individual stocks, Bharti Airtel, Eternal, IndusInd Bank, Tata Motors, Tech Mahindra, Maruti Suzuki, Bajaj Finserv, Bajaj Finance, Tata Steel, Nestle India, and M&M were among the top Sensex gainers in early trade, rising up to 1.4%. Ultratech Cement, TCS, Titan, ICICI bank, Sun Pharma & Axis bank were some of the top losers, shedding up to 0.65%. Positive sentiment was further confirmed by the wider markets, with the Nifty Midcap index and the Nifty Smallcap index trading higher, up 0.5% each, suggesting a broad-based positive move.
Before that, an unusual number of block deals crossed the tape in the first session. Tata Technologies’ share price dropped by 1.6% after US-based TPG was said to have sold a 2.1% stake. Aditya Birla Fashion & Retail also saw its shares tumble over 8% as Flipkart divested its entire 6% stake in the company. Motilal Oswal Financial Services surged after a block deal involving 0.6% of equity was executed. At the same time, the Indian Rupee was trading modestly lower against the US Dollar in opening trade. While Foreign Portfolio Investors (FPIs) were net sellers on Tuesday, making this a recurring phenomenon in recent days, Domestic Institutional Investors (DIIs) were net buyers, which helped provide some cushion to the market.
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Though the market is trading out of the gate with a positive bias today (admittedly led by relief from further Argentine crisis contagion spreading), investors will be exceptionally reactive to any negative news, especially any news on US trade policies or the current China-US flare-up. Domestically, everyone’s attention will be trained on the RBI’s policy meeting on Friday, which should offer more information on where the central bank plans to go with interest rates, and its long-term view on the economy for the rest of 2025. Market experts expect more consolidation in the short term, with the Nifty expected to remain range-bound in the 24000-25000 band.
