The Indian rupee strengthened by 5 paise to 88.75 against the U.S. dollar in early trade, adding further momentum to domestic equities
Indian equity indices experienced a significant rebound on Wednesday, ending an eight-day losing streak. The BSE Sensex surged over 650 points to trade at 80,921 as of 11:57 AM, while the Nifty 50 gained 167 to trade at 24,778 as of the same time.
This uptick was primarily driven by strong buying interest in banking and financial stocks following the Reserve Bank of India’s (RBI) decision to keep the policy repo rate unchanged at 5.5% for the second consecutive meeting.
The RBI’s Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, opted for a neutral stance, indicating a cautious approach amid ongoing global uncertainties, including trade tensions and inflationary pressures. The central bank’s decision to maintain the current rate was seen as a move to assess the cumulative impact of previous rate cuts and fiscal measures.
Investor sentiment was further bolstered by the RBI’s proposals to enhance capital market lending by banks, provide greater operational flexibility for borrower accounts, and remove the regulatory ceiling on lending against listed securities. These measures are expected to improve liquidity and credit flow in the financial system, particularly benefiting sectors reliant on capital markets.
Global cues also contributed to the market’s positive performance. Asian markets, including South Korea’s Kospi, traded higher, and U.S. markets closed in the green on Tuesday, providing a favorable backdrop for Indian equities. Additionally, Brent crude oil prices declined by 1.4% to $67.02 per barrel, easing inflation concerns and supporting investor confidence.
The Indian rupee strengthened by 5 paise to 88.75 against the U.S. dollar in early trade, adding further momentum to domestic equities. The India VIX, a gauge of market volatility, fell by 3.68% to 10.66, indicating reduced investor apprehension and encouraging risk-taking behavior.
Looking ahead, market analysts maintain a cautiously optimistic outlook. Technical indicators suggest potential upside targets for the Nifty 50 at 24,970 and 25,050, with immediate resistance levels at 24,720 and 24,800. Key support levels are identified at 24,500 and 24,336. The market’s direction will depend on the RBI’s future policy actions, global economic developments, and domestic economic indicators.
Also Read: LG Electronics India to Launch ₹11,607 Crore IPO on October 7