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The Indian stock market saw a surge in volatility early on Friday, as benchmark indices Sensex and Nifty fluctuated ahead of the Reserve Bank of India's (RBI) monetary policy announcement.
In the early session, the 30-share BSE Sensex dropped 75.16 points to 81,690.70, while the NSE Nifty fell by 25.45 points to 24,682.95. Both indices were observed to swing between highs and lows throughout the session, reflecting market uncertainty.
Among the top losers from the Sensex pack were Tata Consultancy Services, Tata Motors, Larsen & Toubro, Reliance Industries, UltraTech Cement, and HDFC Bank, which saw their stocks decline. On the other hand, ITC, Power Grid, Mahindra & Mahindra, ICICI Bank, Adani Ports, and Bharti Airtel saw positive movement, helping to counterbalance the market downturn.
Foreign Institutional Investors (FIIs) made a notable comeback by purchasing equities worth Rs 8,539.91 crore on Thursday, according to data from the stock exchanges. This influx of foreign capital came after two months of sustained selling, helping to improve market sentiment and provide a boost to domestic markets. Encouraged by the positive shift in FII activity, retail investors have joined the buying wave, leading to sharp fluctuations in intra-day trade.
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V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented that the reversal in FII behaviour has changed market sentiment, favouring the bulls. He added that the sharp intra-day volatility is being driven by this shift, with short-covering also contributing to the price swings.
The market's focus is now on the upcoming RBI policy statement, with investors keenly awaiting the central bank's guidance on growth, inflation, and the broader economic outlook. This monetary policy decision is expected to offer insights into the RBI's stance on key economic factors as India navigates its post-pandemic recovery.
In international markets, Asian stock exchanges witnessed mixed results, with Seoul and Tokyo trading lower, while Shanghai and Hong Kong registered gains. US markets had closed lower on Thursday.
Meanwhile, global oil prices showed a slight dip, with Brent crude oil dropping by 0.10 per cent to USD 72.02 per barrel. The volatile trading was also affected by the oil market's fluctuations as investors await further signals on global economic health.
The Sensex had rallied for the fifth consecutive day on Thursday, surging by 809.53 points or 1 per cent to finish at 81,765.86, while the Nifty advanced by 240.95 points, or 0.98 per cent, to close at 24,708.40. Investors will closely monitor the RBI's upcoming announcement, which could be pivotal for market sentiment going forward.
(With inputs from PTI)
