Indian Shares Edge Higher as Banks, Trent Lift Sentiment Ahead of RBI Rate Decision

Indian shares moved higher on Tuesday, building on the previous session’s recovery as investors found some comfort in encouraging quarterly updates from banks and consumer companies. The gains, however, remained measured, with the Reserve Bank of India’s interest-rate decision due on Wednesday keeping some caution in the market. 

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The Nifty 50 was up 0.35% at 22,635.70 at 9:52 am, while the Sensex gained 0.34% to 72,630.42. 

Both benchmarks had risen around 0.6% on Monday, breaking out of an eight-week losing streak — their longest in 25 years. 

Lower oil prices and easing expectations of aggressive monetary tightening in the United States offered some relief after weeks of pressure on Indian equities. 

Financial Stocks Get Buyers After Quarters' Update

Most of the gains seen in Tuesday morning came from the financial stocks. 

The financial services, banking and private banks indices advanced between 0.6% and 1.1%, with Axis Bank and Kotak Mahindra Bank amongst those that stood out. 

Axis Bank climbed 1.4%, while Kotak Mahindra Bank jumped 3.8% following the positive growth in quarterly advances and deposits by the lenders. 

In general, 13 out of 16 major sectoral indices saw a rise. 

The recovery wasn’t limited to the big players, as the Nifty Smallcap 100 climbed 0.8%, while the Nifty Midcap 100 gained 0.5%. 

According to Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services, the market was witnessing some reprieve after eight weeks of continuous losses. 

Trent Surges 10% After Revenue Update

Trent was among the biggest movers of the session, surging around 10%. 

The apparel retailer projected a 23% year-on-year increase in standalone revenue for the September quarter, drawing investors to the stock. 

Godrej Consumer Products also gained 2% after projecting high-teens percentage growth in consolidated revenue for the second quarter. 

The moves showed investors responding strongly to company-specific updates even as the broader market remained cautious ahead of the RBI decision. 

Lower Oil Prices Offer Some Relief 

Crude prices provided another supportive cue. 

Brent crude hovered around $101 a barrel after falling $2 overnight, helped by increased oil exports from the Middle East and a Group of Seven pledge to raise supplies. 

For Indian markets, the decline offered some respite after elevated oil prices had contributed to the pressure seen in recent weeks. 

That relief was partly offset by another rise in US Treasury yields. The 10-year and 30-year yields touched fresh 24-year highs overnight as inflation concerns continued to trouble bond markets. 

RBI Decision Now Takes Centre Stage 

The imminent event that concerns Dalal Street is the RBI policy decision on Wednesday. 

Expectations among the market are getting set for a 25 basis points hike in repo rate. It will be the first interest rate hike since February 2023 from the RBI side. 

The RBI decision comes amid some tough times in equity markets; hence, the move along with the guidance will hold significance for sentiment in equity markets. 

Investors won’t have to wait long for another big domestic event as well. The earning results of Tata Consultancy Services are due on Thursday. 

Currently, Indian equities are clinging on to their recovery rally on the part of the week. Some positive business developments from banking and consumption sectors have brought buyers in selected stocks, but the RBI decision tomorrow has kept investors in cautious relief mode.