Indian Stock Market Opens Higher Ahead of RBI MPC Meeting

Mumbai, June 5: Amid global tensions, the Indian stock market opened in the green on Friday, the last trading day of the week, ahead of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting results.

The 30-share BSE Sensex opened at 74,629.94, up 269.93 points from its previous close of 74,360.01. Meanwhile, the NSE Nifty 50 opened at 23,478.95, gaining 62.4 points from its last close of 23,416.55.

As of approximately 9:38 AM, the Sensex was trading at 74,510.65, reflecting an increase of 150.64 points or 0.20 percent. The Nifty 50 also rose by 32.75 points or 0.14 percent, trading at 23,449.30.

The broader market showed a positive trend as well, with the Nifty Midcap Index rising by 0.44 percent and the Nifty Smallcap Index increasing by 0.23 percent.

Sector-wise, the Nifty Media and Nifty Realty stocks saw the most significant gains. Other sectors such as Nifty PSU Bank, Nifty Healthcare, Nifty Consumer Durables, Nifty Financial Services, and Nifty Auto also experienced positive movements. Conversely, Nifty Metal, Oil and Gas, Nifty IT, and Nifty FMCG stocks faced declines.

Among the Nifty 50 stocks, HDFC Life, Bajaj Finance, Adani Enterprises, SBI Life, and Tech Mahindra recorded the highest gains, while Wipro, Hindalco, Tata Steel, and Trent saw the most significant losses.

Investors are keenly awaiting statements from RBI Governor Sanjay Malhotra, which could provide new insights into inflation and economic growth.

Market experts believe that the RBI may keep the repo rate steady at 5.25 percent this time. Thus, investors will closely monitor signals related to interest rates, inflation, and growth outlook.

One market expert mentioned that considering the shocks in energy prices and their broader economic impacts, the RBI might slightly lower its GDP growth forecast for the fiscal year 2026-27. Additionally, there is a possibility of an upward revision in the Consumer Price Index (CPI) inflation estimates.

Experts suggest that the RBI’s most likely strategy could be a “hawkish hold,” indicating that while interest rates may remain unchanged for now, there are signals of potential inflation increases in the coming months, which may necessitate rate hikes by year-end.

They further noted that if the RBI decides to raise interest rates by 25 basis points (0.25 percent), banking stocks could see a sharp rise, as higher interest rates benefit banks’ income and margins.

However, the impact of rising interest rates will not be uniform across all sectors. Interest-sensitive sectors like automobiles and real estate may face negative effects, as higher rates make loans for vehicles and homes more expensive, potentially dampening demand.