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Informist, Tuesday, Sept. 30, 2025

 

By Simran Rede

 

MUMBAI – Weakness in the domestic equity market is expected to persist Wednesday with a cautious move by investors as they will assess the Reserve Bank of India's Monetary Policy Committee meeting outcome due at 1000 IST. Analysts also expect some volatility in the market Wednesday. 

 

The Nifty 50 settled at 24611.10 points, down 23.80 points, or 0.1%. The BSE Sensex closed at 80267.62 points, down 97.32 points, or 0.1%. The Nifty 50 closed lower for the eighth consecutive session. The index moved in a tight range of 144 points through the day. Tuesday's session was volatile because of the expiry of the monthly futures and options contracts on the National Stock Exchange, which happened on a Tuesday for the first time.

 

Going ahead, analysts expect the Nifty 50 to face selling pressure until it crosses 24800–25000 points in the near term. On the other hand, a fall below 24600–24550 points will push the index towards 24300 levels. "There was non-directional intraday activity, with a small bearish candle indicating indecisiveness between the bulls and the bears," Shrikant Chouhan, head of equity research at Kotak Securities, said in a note. Till then, the index will continue to move in a thin range.

 

Market participants will keenly watch RBI Governor Sanjay Malhotra's comments for cues on the interest rate and inflation projection trajectories. The market widely expects a status quo on rates. The RBI may revise the inflation projection downwards because the benefit of GST rationalisation will start reflecting in the computation at the beginning of October, Sunny Agrawal, head of research at SBICAP Securities, said.

 

According to an Informist poll, the RBI's Monetary Policy Committee is expected to keep the interest rates unchanged for the second meeting in a row on Wednesday. While eleven of the 15 economists polled by Informist expect the rate-setting committee to keep the repo rate unchanged, Barclays, Capital Economics, Morgan Stanley, and Nomura see a 25-basis-point interest rate cut on Wednesday. The six-member panel unanimously left the policy repo rate unchanged at 5.50% in August. The MPC has reduced the interest rate by 100 bps so far in 2025.

 

"On the top of that, oil prices are also trending down. So, I think there is a possibility of lowering the inflation projection for the coming quarters," Sunny Agrawal said. The future contracts of Brent Crude oil traded on the Intercontinental Exchange fell to a low of $66.95 a barrel. The contract is down for the second session after having risen continuously for four sessions earlier.

 

"While the market expectation on the upcoming policy is mixed, the recent tighter financial conditions caused by domestic and global factors, and the pending India-US trade deal, the RBI's decision to hold the rate with a softer guidance will be positively seen by the market," Deepak Agrawal, chief investment officer of debt at Kotak Mahindra AMC, said in a note.

 

In the upcoming meeting of the RBI on the decision on monetary policy, the major factor to watch out for will be the RBI's strategy to tackle the depreciation of the rupee against the dollar, whether the apex bank will intervene or not, Sunny Agrawal said. The rupee ended at a record closing low against the dollar for the second consecutive trading day, settling at 88.7875 on Tuesday, against 88.7600 on Monday. However, the RBI's relentless intervention through dollar sales limited losses for the Indian unit, dealers said. 

 

Due to the depreciation of the rupee against the greenback, foreign institutional investors have continued their selling trend for many sessions. Till Monday, foreign portfolio investors have offloaded INR 135.47 billion worth of Indian stocks. Sunny Agrawal cited the reason for FII outflows in India to the depreciation of the rupee and slow earnings growth. He expects the corporate earnings growth to pick up from the December quarter on the back of GST reforms.

 

On the global front, the tariffs imposed by US President Donald Trump will be a key factor to monitor. While the impact of US tariffs has already been discounted by the market, if there is any other additional sector which comes under the tariff umbrella, then that may have an impact on that particular sector, Sunny Agrawal said.

 

On the sectoral front back home, public sector undertaking banks are expected to be in positive territory in the near term as public-sector banks hold relatively better current and savings account ratio as compared to private peers, Sunny Agrawal of SBICAP Securities said. The Nifty PSU Bank closed 1.8% higher and was the top gaining sectoral index for the second session. The index has risen over 11% in September.  End

 

Edited by Deepshikha Bhardwaj

 

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