The Indian stock market opened with a marginal positive bias on Friday, maintaining its five-day winning streak amid heightened anticipation of the Reserve Bank of India’s (RBI) monetary policy decision and ongoing foreign institutional investor (FII) buying.
The Sensex opened higher at 81,887.54 from its previous close of 81,765.86 and is currently trading at 81,775.46 as of 9.40 AM, up by 9.60 points or 0.01 per cent. The Nifty opened at 24,729.45 compared to its previous close of 24,708.40 and is now at 24,709.70, gaining 1.30 points or 0.01 per cent.
Foreign institutional investors (FIIs) continued their bullish stance, purchasing equities worth ₹8,540 crore on Thursday, signaling renewed confidence in the Indian market. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, “FIIs turning buyers in December has altered market sentiments in favour of the bulls.”
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The market is particularly focused on the RBI’s potential monetary policy decisions. “The policy response of the RBI and the central bank’s commentary on growth and inflation outlook will be keenly watched,” Vijayakumar added. Analysts anticipate the central bank might consider reducing the cash reserve ratio (CRR) to improve system liquidity.
Sectoral movements showed mixed trends. Auto stocks displayed strength with Bajaj Auto leading gainers at 2.39 per cent, followed by Eicher Motors at 1.68 per cent and Hero MotoCorp at 0.92 per cent. ITC and Power Grid also showed positive momentum, rising 1.53 per cent and 1.01 per cent respectively.
However, IT stocks experienced pressure, with TCS declining 1.04 per cent and Wipro falling 0.74 per cent. Tata Motors, L&T, and Ultratech also registered marginal losses, indicating sector-specific volatility.
Technical analysts are tracking key resistance and support levels. Akshay Chinchalkar from Axis Securities highlighted, “A key resistance area lies between 24,800 and 24,850, with higher resistance around 24,965. Support remains near 24,360.”
Hardik Matalia from Choice Broking recommended a cautious approach, “Traders are advised to adopt a buy-on-dips strategy as long as the index holds above 24,200, with a strict stop-loss at 24,000 on a closing basis.”
Global market context adds another layer of complexity. U.S. markets experienced a pause ahead of the monthly jobs report, which could influence Federal Reserve’s interest rate decisions. Deepak Jasani from HDFC Securities noted, “Stocks lost steam near all-time highs, with Wall Street traders gearing up for key jobs data.”
The Indian market’s current trajectory looks promising. Historical data suggests a positive trend during this period. Chinchalkar pointed out that over the last 20 years, the Nifty has advanced 75 per cent of the time from now till year-end, with average returns of 1.7 per cent and median returns of 2.4 per cent.
Market volatility remains a key characteristic, with the Nifty experiencing significant intraday fluctuations. The Index volatility (INDIAVIX) was up 0.54 per cent and trading at 14.5275, indicating potential market uncertainty.
As investors await the RBI’s monetary policy outcome, the market remains poised for potential significant movements. The 25,000 level for Nifty is being closely watched as a critical resistance point, with a sustained breakout potentially opening doors for further upside.
