Stock market update: Nifty 50 and Sensex break 6-day losing streak, rise nearly 1% ahead of RBI policy decision

After facing selling pressure for six straight sessions, the Indian stock market enjoyed a much-needed reprieve on Tuesday, October 8, as investors bought the dip. 

Investors now keenly await the Reserve Bank of India's (RBI) monetary policy decision on October 9. While the central bank is expected to hold rates, a change in stance could be on the cards.

Both the frontline indices - Sensex and Nifty - ended the day in positive territory, primarily fueled by a notable increase in banking and auto stocks. Consequently, Nifty 50 closed the session with a gain of 0.88%, finishing above the 25,000 mark at 25,013. Similarly, the Sensex wrapped up the day with a 0.72% increase, settling at 81,634.

The market capitalisation of companies listed on the BSE increased by approximately ₹8 lakh crore today. Out of the 50 constituents in the Nifty index, 36 closed in the positive territory, with Trent leading the way, rising by 8%. Other notable performers included Bharat Electronics, Adani Enterprises, Adani Ports SEZ, Mahindra & Mahindra, Coal India, Bajaj Auto, Apollo Hospitals, and HDFC Bank, all of which finished Tuesday's session with gains exceeding 2%.

Broader markets also experienced a notable rebound, with the Nifty Midcap 100 index rising by 2.16% to 58,535, while the Nifty Smallcap 100 index gained 2.05% to settle at 18,617.

Paytm emerged as one of the top gainers in the broader market. Paytm stock soared 15.2%, achieving its largest single-day increase since February 2023. Other significant gainers included Triveni Turbine, BSE, HEG, Anant Raj, Varun Beverages, HUDCO, Saregama India, Jaiprakash Power Ventures, and DOMS Industries, all of which concluded the session with gains surpassing 8%.

Of the 100 constituents in the index, 85 finished the day in the positive territory. Likewise, 84 out of the 100 stocks in the Nifty Smallcap index closed in the green.

Commenting on today's market performance, Vinod Nair, Head of Research, Geojit Financial Services said, "After sessions of corrections, India is getting some support at the level of 25,800 for Nifty50. Good state election result for the ruling party, contrary to the exit polls, has brought some optimism in the domestic market. RBI policy outcome, though no cut is expected, a plausible change in stance to neutral is anticipated. And investors are likely to focus on the upcoming Q2 results where earnings are likely to improve marginally on a QoQ basis."

Metal stocks tumble

Nifty Metal index ended the trade with a drop of nearly 1% after China's leading economic planner failed to introduce further stimulus measures. NMDC stood as the top loser, with a drop of 4.3%. The stock at one point plummeted by as much as 8%. Tata Steel and JSW Steel also faced losses, declining by more than 2%.

The much-anticipated briefing by China's National Development and Reform Commission ended without any new promises for increased government spending.

Analysts were expecting Beijing to announce significant fiscal support, including trillions of yuan in bond issuances and initiatives to stimulate consumption. However, the government instead unveiled a modest investment plan of CNY 100 billion for the upcoming year, a stark contrast to the current year's allocation of CNY 1 trillion, as per the recent media reports.

Baking stocks shine

After the better-than-expected business updates from the private banks and rate cut buzz in the RBI Monetary Policy meeting, banking stocks witnessed sharp uptick in today's session.

The Nifty Bank index rose by 1.15%, led by 2.1% gains in HDFC Bank shares. Other banks, including Federal Bank, Bank of Baroda, Canara Bank, SBI, and IDFC First Bank, also contributed to the positive momentum, each ending the day with gains of over 1%.

Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities, said, “Banking stocks are rising due to two major reasons: the better-than-expected Q2FY25 business update by the listed banking companies and the rate cut buzz in the RBI MPC meeting. This has sparked demand in the private sector banking stocks, which include HDFC Bank, ICICI Bank, SBI, Axis Bank, etc.”

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.