The Indian benchmark indices Nifty and Sensex concluded the day with a strong close after the RBI policy meeting on Friday. The market was awaiting no negatives from the RBI MPC meeting today. Benchmarks reacted positively to the meeting, as it was just maintaining the status quo from the governor, Shaktikanta Das.
Market Movement of the Day: Sensex Today
The S&P BSE Sensex closed the day at 65,995.63, gaining 364.06 points, or 0.55%. Nifty 50 also concluded the day at 19,653.50, up 107.75 points, or 0.55%.
On the other hand, Nifty Bank’s share price was very volatile throughout the day today. Despite positive sentiments from the domestic and global markets, Bank Nifty wasn’t able to sustain itself at higher levels.
The Bank Nifty closed the day at 44,360.60, adding just 147.25 points. The index gained merely 0.33% today, which disappointed most traders.
The real excitement was in the broader market indexes today. The mid-cap and small-cap indices refused to lose momentum throughout the day. Stocks from those categories continued the early gains and closed at higher levels by the end of the day today.
The Nifty midcap and smallcap indices closed the session up by 0.6% and 0.8%, respectively.
Rates Unchanged in RBI Policy Meeting
The RBI has opted to keep the policy rates unchanged at its RBI MPC meeting on Friday. It was the same as what the majority of experts predicted earlier. But he maintained a hawkish stance and restricted the surge in the market initially.
Das clarified, “The MPC unanimously decided to keep the policy repo rate at 6.5 percent” after assessing macroeconomic and financial factors.
He went on to elaborate, stating, “Five out of six members of the MPC decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth.” This move had little negative impact on the stock market because it was substantially in accordance with economists’ and stock markets’ predictions.
The RBI governor, Shaktikanta Das, pointed out that the overall inflation outlook remains uncertain amid geo-political tensions. He also stated that the MPC stays extremely alert in order to implement prompt policy changes to address any inflationary resurgence.
The RBI kept its inflation estimate for FY24 at 5.4%. He is also concerned about uncertainty in the global economy and other domestic factors.
US Jobs Report
The US market is waiting for the September employment report at 8:30 a.m. ET. This report is crucial for the day and the week ahead.
Analysts predict a 160,000 increase in nonfarm payrolls, a drop in unemployment to 3.7%, and a 0.3% wage increase from August. It seems like a simple and reliable report. But the Federal Reserve wants to see if there are job market weaknesses.
Recent job stats have been a bit up and down, but mostly dependable. Towards the end of the year, it looks like job growth might slow down. This report will likely affect how investors feel about the market and how they trade in the coming days and weeks.
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Bottom Line
Even though the RBI’s decision was as per the expectations of the majority of experts, market volatility will remain in the near term.
Market experts believe that the Indian market will take fresh cues from the Q2 earnings, which will start next week. So, the Q2 numbers will probably decide whether to consolidate further in the market or start a new trend.
Also, next week, Bank Nifty has to take the lead from the front to make the benchmarks stronger at higher levels. Market participants anticipate a better week going forward because Brent Oil has already crashed 12% from its peak. However, we have to look at other factors as well, such as the dollar index, bond yields, and how US markets close today.
