Sensex & Nifty Snap 5-Week Losing Streak, Rebound Sharply Ahead of RBI Meet

Breaking a five-week losing streak, the Indian stock market staged a sharp rebound on Monday, bringing much-needed relief to investors. The rally was broad-based, with strong buying interest in metal, IT, and auto stocks pushing benchmark indices significantly higher as the market’s focus shifted towards the Reserve Bank of India’s (RBI) upcoming monetary policy decision.

The BSE Sensex surged 418.81 points (0.52%) to close at 81,018.72, while the NSE Nifty 50 advanced 157.40 points (0.64%) to settle at 24,722.75. This positive momentum ended the market’s longest weekly losing streak in two years.

What Fueled the Rally?

Several factors contributed to Monday’s market revival:

• Positive Global Cues & Weakening Dollar: Market sentiment was boosted by largely positive global cues and a weakening US dollar. A softer dollar typically makes commodities cheaper for holders of other currencies, which drove a strong rally in metal stocks.
• Bargain Hunting: After five consecutive weeks of declines, many quality stocks had become attractive at lower valuations, prompting investors to engage in bargain hunting.
• Sectoral Rotation: There was a clear shift in investor interest. While the FMCG sector saw some profit booking, there was strong buying in cyclical sectors. The Nifty Metal index was the top sectoral gainer, surging by 2.45%, followed by the IT and Auto indices, which both gained 1.6%.

Market Movers: Top Gainers and Losers

The rally was led by strong performances from several blue-chip companies. The top gainers on the Nifty 50 were:

• Hero MotoCorp: The two-wheeler giant surged 5.18% to close at ₹4,535.
• Tata Steel: Benefiting from the rally in the metal sector, the stock climbed 4.08% to close at ₹159.25.
• Adani Ports: The ports and logistics company saw its shares rise by 3.56%, closing at ₹1,395.
• Bharat Electronics Ltd (BEL): The defence PSU continued its strong run, adding 3.37%.
• JSW Steel: Another major gainer from the metal pack, the stock rose 2.86%, supported by strong domestic steel demand.

On the other hand, some stocks faced selling pressure, with Power Grid, HDFC Bank, and ONGC among the top losers on the Nifty 50.

What to Watch Next

While Monday’s rally was a welcome change, investors should remain watchful. Here are a few key factors to monitor:

• RBI’s MPC Meeting: The three-day MPC meeting, which began today, is the most significant domestic event this week. The outcome, to be announced on August 6, will provide crucial direction on interest rates, inflation, and the central bank’s economic growth stance.
• Global Economic Cues: Global market trends, commodity prices, and geopolitical developments will continue to influence market sentiment.
• Q1 Earnings: The corporate earnings season is still underway. The financial performance of individual companies will continue to drive stock-specific movements.
• FII Activity: Foreign Institutional Investors (FIIs) have recently been net sellers in the Indian market. A reversal of this trend is crucial for a sustained rally.

Today’s rebound is a positive sign, but the market’s future direction will depend on the interplay of these domestic and global factors. For now, investors can take comfort in the fact that the bulls have made a strong comeback.

This article is for informational purposes only and should not be considered investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions.