Sensex, Nifty Decline As Investors Turn Cautious Before RBI Meet

Benchmark equity indices Sensex and Nifty ended sharply lower on Thursday, snapping a three-session winning streak, as weak global cues and caution ahead of the Reserve Bank of India’s policy decision pushed investors to cut risk. Heavy selling in metal, IT, and capital goods stocks added to the pressure, traders said.

Sensex And Nifty Drop

The 30-share BSE Sensex fell 503.76 points, or 0.60%, to close at 83,313.93. The index slid as much as 666.07 points during the session before trimming some losses. The NSE Nifty dropped 133.20 points, or 0.52%, to settle at 25,642.80.

Market breadth remained weak through the day. On the BSE, 2,447 stocks declined, while 1,737 advanced. Another 158 shares ended unchanged.

Global Risk-Off And Policy Caution

Analysts pointed to a mix of global and domestic triggers behind the decline. They added that global cues worsened sentiment. According to them, concerns over a broad-based tech sell-off in international markets and heightened US-Iran tensions led to a risk-off mood.

The timing of the sell-off also reflected caution ahead of the RBI’s Monetary Policy Committee (MPC) decision, due on Friday. RBI Governor Sanjay Malhotra will announce the policy outcome after the three-day MPC meeting.

Sensex Stocks Under Pressure

Selling was widespread among index heavyweights. From the Sensex pack, Eternal, Bharti Airtel, Bharat Electronics, ITC, Infosys, Reliance Industries, ICICI Bank, and Asian Paints were among the top losers.

Buying interest was limited and selective. Trent, Tata Steel, State Bank of India, and Bajaj Finance managed to close higher, offering some support to the benchmarks. The mixed performance among large caps reflected a shift towards defensive positioning rather than fresh risk-taking, dealers said.

Sectoral Indices Show Broad Weakness

Most sectoral indices ended in the red, mirroring the cautious tone. The worst-hit sectors included:

• Capital goods, which was down 1.07%

• Metal, which was down 1.05%

• Consumer durables, which was down 0.88%

• BSE Focused IT, which was down 0.78%

• IT, which was down 0.76%

• Telecommunication, which was down 0.72%

PSU banks and oil & gas stocks bucked the trend and closed higher, supported by selective buying.

RBI Policy And Market Impact

The RBI policy announcement on Friday can be a key trigger for markets. Investors are likely to watch the announcements made by the RBI carefully. Any shift in tone could influence rate-sensitive stocks.

On the other hand, a steady policy may keep markets focused on global cues and fund flows. Bond yields, the rupee, and equity valuations are likely to react quickly once the decision is announced, shaping short-term market direction.

Sources:

Mid-day

Business Standard