Nifty Closes at Day’s High, Up 220 Points; Broader Markets Outperform as Crude Slips Below $100

Indian equity benchmarks ended Tuesday’s session with strong gains, extending the recovery for a second consecutive day. Buying was visible across large-caps as well as the broader market, while easing crude oil prices and a positive global setup helped improve risk appetite ahead of the Reserve Bank of India’s monetary policy announcement on October 7.

The Nifty 50 opened at 22,603.25 and briefly slipped to 22,561.60 during the early part of the session. However, buyers gradually regained control and the index moved higher through the day. Momentum strengthened in the afternoon session, with the index eventually extending gains during the closing auction.

At the end of trade, the Nifty 50 settled at 22,776.10, up 220.35 points or 0.98%. The Sensex climbed 685.34 points or 0.95% to 73,067.81.

Bank Nifty also closed higher, although it lagged the headline indices with a gain of 0.76%.

Volatility eased sharply during the session. India VIX dropped nearly 8% and slipped to 13.6. 

Broader Markets Outperformed: Nifty Smallcap Index Jumped Over 1.5%

The broader market ended stronger than the frontline indices.

The Nifty Midcap 100 gained 1.08%, while the Nifty Smallcap 100 advanced 1.56%.

Sectoral Performance: Pharma Index Gained Over 1.6% 

Sectoral performance remained largely positive, with eight of the 11 major sectoral indices closing in the green.

The Nifty Pharma index emerged as the top performer, rising 1.66% and snapping a three-session losing streak. Wockhardt was among the stronger stocks within the space, gaining more than 5%.

The Nifty IT index, however, moved in the opposite direction and fell 0.59%, with most of its constituents ending lower.

Softer Crude Prices Offer Relief to Indian Equities

Crude oil provided an important support to sentiment during the session. Brent crude slipped below $100 per barrel, extending its decline as oil supplies from the Middle East continued to recover.

JPMorgan estimated that crude shipments from the region had rebounded to around 17.5 million barrels per day, equivalent to about 98% of pre-war levels. Kuwait was also reported to be producing at nearly 75% of its pre-war output.

Improving flows through the Strait of Hormuz and Saudi Arabia’s decision to cut the price of its flagship crude grade for Asian buyers further indicated an easing supply situation.

For India, which remains a major importer of crude oil, lower energy prices are generally supportive as they reduce concerns around inflation, the trade balance and input costs.

Rupee Falls to Two-Month Low Ahead of RBI Decision

While equities strengthened, the Indian rupee remained under pressure.

The currency weakened to a more than two-month low and closed at 96.42 against the US dollar, affected by continued foreign outflows from domestic equities.

Dollar selling by state-run banks, likely on behalf of the RBI, helped contain the decline.

Attention has now shifted to Wednesday’s RBI policy decision. A 25-basis-point rate hike is widely expected, while investors will also closely watch the central bank’s commentary on inflation, liquidity, currency stability and the future path of interest rates.

The policy outcome could therefore become an important near-term trigger for both equities and the rupee.

European Markets Trade Firm

Global cues remained supportive during Indian market hours.

European equities were trading higher, with Germany’s DAX up 0.62% at 25,411.69. The FTSE 100 gained 0.53% to 10,553.50, while France’s CAC 40 advanced 0.61% to 7,882.13.

The broadly positive trend across Europe helped maintain the constructive sentiment seen in Asian and Indian markets.

US Futures Point to Positive Wall Street Opening

US stock futures were also trading higher ahead of the opening bell.

Dow Jones futures gained 0.39% to 51,761, while S&P 500 futures advanced 0.21% to 7,842.75. Nasdaq 100 futures rose 0.35% to 31,427.

The gains indicated a positive opening bias for Wall Street and added to the favourable global backdrop for domestic equities.

RBI Policy Takes Centre Stage

After two consecutive sessions of gains, market attention is now firmly on the RBI’s October 7 policy decision.

The Nifty has managed to recover from recent weakness, while falling crude oil prices and improving global sentiment have offered some relief. However, the policy outcome, the RBI’s stance on interest rates and its assessment of inflation and currency pressures could determine whether the rebound extends further.

With the rupee trading near a two-month low and global energy risks still present, investors are likely to closely track both the rate decision and the central bank’s forward guidance.