RBI policy day puts markets on edge as Nifty opens flat; oil slump, Wall Street records lift sentiment

Markets started cautiously optimistic on Wednesday, August 5, as oil prices plummeted and Wall Street achieved record gains overnight, providing a boost to sentiments despite domestic uncertainties surrounding the Reserve Bank of India's monetary policy decision later in the day. The Sensex opened at ₹78,832.06, up 0.51%, while the Nifty 50 began at ₹24,627.95, also up 0.05%.

Analysts attributed the positive market response to the significant drop in oil prices, Brent crude falling below $80 per barrel, and record-setting gains on Wall Street. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, expressed optimism, citing resilience in growth, improving corporate earnings, and Foreign Institutional Investors turning net buyers for six consecutive days.

However, domestic Institutional Investors remained net sellers, offloading equities worth ₹936 crore. Among Nifty 50 gainers, Larsen & Toubro rose 1.87% to ₹4,064.70, while IndiGo climbed 1.81% to ₹5,455. On the losing side, Apollo Hospitals fell 2.28% to ₹8,843.50, and Sun Pharma declined 1.34% to ₹1,937.70. Sectoral performance was mixed, with real estate declining 2.40% and media and metal sectors closing in the green.

The overnight Wall Street surge was driven by technology stocks, with the Dow Jones Industrial Average up 1.7%, S&P 500 up 1.8% to a record high, and Nasdaq Composite up 2.6%. RBI's Monetary Policy Committee decision remained the main risk for the session, with the central bank expected to hold the repo rate steady at 5.25% and maintain a neutral stance.

Analysts suggested Nifty should sustain above 24,600 to capitalize on recent recovery, with the next target zone being 24,800–25,000. Bank Nifty is anticipated to find support between 57,400 and 57,500, with resistance at 58,500–58,600.