Indian markets dip amid oil spike and RBI policy anticipation
Indian stock markets opened lower on Wednesday, ending a brief two-day rally as investors reacted to rising crude oil prices and uncertainty ahead of the Reserve Bank of India's (RBI) monetary policy decision. The BSE Sensex dropped 460 points to 72,599.05, while the NSE Nifty fell 164.80 points to 22,610.85. The decline was led by stocks like Titan, Asian Paints, Bharat Electronics, Maruti, Axis Bank, and Mahindra & Mahindra, though Bajaj Finance and Bharti Airtel saw gains.
The spike in Brent crude oil prices, which rose 1.01% to USD 101.6 per barrel, weighed heavily on market sentiment. Analysts noted that foreign institutional investors (FIIs) continued to sell equities, with outflows totaling Rs 2,961.30 crore on Tuesday. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted that while domestic liquidity and expectations of strong Q2 earnings provided some support, the focus remained on the RBI's policy stance.
Geopolitical risks and weaker Asian markets further contributed to the downward pressure. South Korea's Kospi, Japan's Nikkei 225, and Hong Kong's Hang Seng index all traded lower. Meanwhile, U.S. markets had closed higher the previous day. Ponmudi R, CEO of Enrich Money, emphasized that the RBI's monetary policy decision, due later in the day, would be a key catalyst for market movements.
The previous day had seen gains, with the Sensex climbing 685.34 points and the Nifty rising 220.35 points. However, the optimism faded as traders braced for the central bank's decision, which could impact future market trends.