Sensex, Nifty Edge Higher Ahead of RBI Policy Announcement

Indian Markets Eye RBI Policy Decision Amid Global Uncertainty

The Indian benchmark indices, Sensex and Nifty, are expected to open marginally higher on Friday, tracking modest gains in the GIFT Nifty. Investors are awaiting the Reserve Bank of India's (RBI) monetary policy decision later in the day, which will be a key trigger for markets. The RBI's decision on the repo rate, as well as its stance on inflation, growth, and liquidity, will be closely watched by investors.

The RBI policy decision comes after the benchmark indices ended largely flat on Thursday, with the Sensex rising just 14 points and the Nifty gaining 11 points. Investors refrained from taking aggressive positions ahead of the RBI outcome, resulting in a mildly positive start for the Nifty 50. The GIFT Nifty was trading at 23,574 in early trade, up 35 points or 0.15 percent.

Global cues remain mixed, with Asian equities falling sharply on Friday. The MSCI's Asia-Pacific index outside Japan was down 1.6 percent, while South Korea's KOSPI plunged more than 6 percent and Japan's Nikkei fell around 1.3 percent. The weakness in Asian markets is attributed to stalled U.S.-Iran peace negotiations and renewed tensions involving Israel and Hezbollah.

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In contrast, Wall Street delivered a mixed performance overnight. The Dow Jones surged 875 points, or 1.73 percent, to a record closing high, supported by healthcare and financial stocks. However, weakness in semiconductor stocks after disappointing results from Broadcom weighed on technology shares, leaving the Nasdaq marginally lower. The S&P 500 gained 0.41 percent.

Crude oil prices remained elevated, with Brent crude hovering around $95 per barrel and WTI crude trading near $92.7. Oil is still on track for weekly gains as uncertainty over a potential end to the Middle East conflict continues to support energy prices.

Investors are likely to remain cautious ahead of the RBI decision, with geopolitical tensions in the Middle East, including the unresolved U.S.-Iran conflict and continued hostilities involving Israel and Hezbollah, remaining a significant source of uncertainty for global markets.

Foreign institutional investors continued to sell Indian equities on June 4, offloading shares worth Rs 4,447 crore. Domestic institutional investors remained supportive, extending their buying streak to thirteen sessions with purchases worth Rs 4,360 crore.

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On the technical front, the Nifty faces immediate resistance in the 23,450-23,550 zone, while the 23,250-23,150 region remains a critical support area. For Bank Nifty, the key resistance zone is placed at 54,400-54,500, while support is seen between 54,000 and 53,800.

Note: The above table represents the change in benchmark indices on Thursday and the expected gain in GIFT Nifty on Friday.