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Nifty gained for the second consecutive session on Tuesday, October 6, rising 220 points to close at 22,776.10 as investors remained upbeat ahead of the Reserve Bank of India’s (RBI) monetary policy decision due on Wednesday.
The index opened nearly 50 points higher, supported by favourable global cues, and sustained its upward momentum through the session before settling near the day’s high.
The Nifty also gained another 58 points during the Closing Auction Session (CAS), extending its advance into the close.
Within the Nifty pack, Trent, BSE and Kotak Mahindra Bank emerged as the top gainers, while Coal India, Tech Mahindra and Max Healthcare were among the key laggards.
Among sectoral indices, Nifty IT, PSU Banks and Realty closed in the red, while the remaining sectoral indices ended higher. Chemicals, Pharma, Oil & Gas and FMCG were among the major outperformers.
The broader market outperformed the benchmark indices, with the Nifty Midcap 100 and Nifty Smallcap 100 rising 1.08% and 1.56%, respectively.
The Indian rupee depreciated 13 paise to close at 96.42 against the US dollar, weighed down by continued dollar demand from foreign portfolio investors and oil companies.
Investors will now turn their attention to the RBI’s policy decision, along with the trajectory of foreign capital flows.
Indian equity markets are likely to remain focused on rate-sensitive sectors such as banks, NBFCs, real estate and consumption ahead of Wednesday’s RBI policy decision.
Markets broadly expect a 25-basis-point repo rate hike, taking the policy rate from 5.25% to 5.50%. Such a move would mark the first repo rate increase since February 2023.
Siddhartha Khemka of Motilal Oswal expects markets to remain firm with a stock-specific bias in the near term. The RBI policy decision and GST Council outcomes will be key triggers, while currency weakness and foreign flows remain the key risks.
Nandish Shah of HDFC Securities said the short-term trend of the Nifty has turned positive, with the index closing above its five-day exponential moving average for the first time since September 23.
Immediate resistance is placed at 22,875, followed by 23,080, while support has shifted higher to around 22,550, Shah said.
Nagaraj Shetti of HDFC Securities said the Nifty could encounter strong overhead resistance around the 23,000 level based on a change in polarity.
A sustained move above 23,000 could confirm a significant bottom-reversal pattern from the swing low of 22,217 recorded on October 1, he said.
However, any weakness could drag the index towards immediate support around 22,400 in the near term.
Rupak De of LKP Securities said the index staged a meaningful recovery on Tuesday after moving above the 22,600 resistance level.
The CAS closing also helped the Nifty finish near 22,800.
In the short term, as long as the index remains above 22,600, sentiment is likely to remain positive, with resistance placed at 22,850, De said. A sustained move above 22,850 could trigger further recovery, while failure to break the level could lead to a correction.
The banking benchmark, Bank Nifty, also ended Tuesday’s session on a positive note and has outperformed the frontline indices over the past four trading sessions.
Sudeep Shah of SBI Securities said the 20-day EMA zone of 55,600-55,700 is likely to act as a crucial hurdle for the index. A sustained move above 55,700 could extend the ongoing pullback rally towards the 50-day EMA, currently placed near 56,400.
On the downside, the 54,600-54,500 zone is expected to provide strong support. As long as Bank Nifty holds above this support band, the pullback momentum is likely to remain intact in the near term.
