Nifty holds gains at open; Trent jumps 10%, RBI decision awaited

The Nifty index maintained its gains at the opening bell on Tuesday, extending its recovery from the previous trading session. This positive momentum was buoyed by a decline in crude oil prices and a robust performance on Wall Street. However, the rally was halted as investors remained wary of the Reserve Bank of India's upcoming monetary policy decision slated for the following day.

At 9:17 am, the Sensex was trading at 72,455.45, up by 72.98 points or 0.10%, while the Nifty 50 opened at 22,603.25, up 25.65 points or 0.11% from its previous close of 22,555.75. Trent emerged as the top performer among the Nifty 50 components, surging by 10% to reach ₹2,838, driven by a trading volume of 2,90,422 shares worth ₹8,183.08 lakh.

Within the banking sector, Kotak Mahindra Bank climbed 2.98% to ₹428.40 on a high trading volume of 25,24,450 shares valued at ₹10,754.91 lakh, while Axis Bank rose 1.21% to ₹1,237 on a turnover of ₹4,610.89 lakh.

Other companies that advanced included BSE Limited, which gained 2.28% to reach ₹3,252, and Hindalco Industries, which saw a gain of 0.85% to ₹946.40. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, pointed out that the current low interest rate environment would favor the banking sector, as a rate hike would improve their margins from rising floating rates. He also noted that strong deposit and credit growth in the economy pointed to positive prospects for the financial sector.

On the downside, healthcare stocks led the losers with Apollo Hospitals falling 1.22% to ₹7,887.50 and Max Healthcare slipping 0.65% to ₹911, marking healthcare as the weakest performing sector of the day. Cipla and Maruti Suzuki also experienced declines of 0.67% and 0.66% respectively.

Overnight, global stock markets showed strength with the Nasdaq Composite surging 1.05% to a record high of 27,477, the S&P 500 gaining 0.66% to 7,774, and the Dow Jones Industrial Average adding 0.18%. This positive trend was led by Nvidia, which achieved a record high. September US payrolls data came in at 29,000, well below the estimated 84,000, pushing the probability of a Federal Reserve rate hold in October to approximately 78% from 36% earlier. The US 10-year Treasury yield climbed slightly to 5.31–5.32%.

Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that elevated yields continued to put pressure on non-AI sectors, while Hariselvan Radhakrishnan of HST Wealth cautioned that the recent rise in the U.S. 10-year Treasury yield to 5.31% might limit further gains by keeping foreign flows and emerging market valuations under pressure.

Brent crude oil prices eased to around $100.30 per barrel following reports of improved oil flows through the Strait of Hormuz, supported by a proposed G7 emergency reserve release and a price cut by Saudi Arabia for Asian buyers. The Indian Rupee appreciated 3 paise to close at 96.29.

Foreign institutional investors recorded a net outflow of ₹4,699 crore, while domestic institutional investors supported the market with a net purchase of ₹5,181 crore. Vijayakumar highlighted that due to the current US 10-year bond yield hovering around 5.3%, Foreign Institutional Investors (FIIs) would likely continue selling, potentially leading to a "sell on rally" scenario.

Analysts are pricing in a 25 basis point Repo rate hike to 5.50% at the upcoming RBI announcement, with 38 out of 61 economists polled expecting this move. Shrikant Chouhan of Kotak Securities predicted the Nifty's intraday support range as 22,400–22,450 and resistance at 22,700–22,750, while Pabitro Mukherjee of Bajaj Broking suggested that a sustained Higher High–Higher Low structure and a reclamation of the 23,000–23,100 level would be necessary for a meaningful trend reversal.