Sensex, Nifty edge higher; RBI policy outcome in focus; Aether Industries & Paytm jump up to 7%

Indian equity benchmarks traded slightly higher in early deals on Thursday ahead of Reserve Bank of India's June policy outcome. The domestic indices rose today led by gains in automobile, metals, state-owned lenders and consumer durables. The 30-share BSE Sensex climbed 57 points or 0.09 per cent to trade at 63,200, while the broader NSE Nifty moved 16 points or 0.08 per cent higher to trade at 18,742. Mid- and small-cap shares were positive as Nifty Midcap 100 gained 0.20 per cent and the small-cap 100 was up 0.12 per cent.

The RBI's rate decision is due to be announced at 10 am. The monetary policy committee (MPC) is expected to leave the repo rate at 6.50 per cent for a second straight meeting. The RBI put a pause on its rate hike cycle in April. The central bank has raised the repo rate by a total of 250 basis points (bps) since May 2022 to keep inflation in check, before opting for a pause at the previous meeting.

On the global front, Asian shares were trading on a weak note. Two out of three major Wall Street equities closed lower overnight ahead of inflation data and the rate decision from the US Federal Reserve next week.

Bach home, six out of the 15 sector gauges -- compiled by the National Stock Exchange -- were trading in the green. Sub-indexes Nifty Auto, Nifty Metal, Nifty PSU Bank and Nifty Consumer Durables were outperforming the NSE platform by rising as much as 0.30 per cent, 0.64 per cent, 0.27 per cent and 0.26 per cent, respectively. Nifty IT and Nifty Healthcare were down 0.34 per cent and 0.24, respectively.

Foreign institutional investors (FIIs) bought Rs 1,382.57 crore worth of Indian equities on Wednesday. In contrast, domestic institutional investors (DIIs) purchased Rs 392.30 crore shares yesterday.

"Nifty and Nifty Bank have experienced a positive June series, thus far, primarily driven by the buying activities of FIIs. Overall, the market sentiment remains positive, with investors keeping a close watch on RBI's decisions and commentary, as well as key technical levels, to gauge the future direction of the market," Ameya Ranadive CMT, CFTe, Equity Research Analyst at Choice Broking.

On the stock-specific front, NTPC was the top Nifty gainer as the stock jumped 2.34 per cent to trade at Rs 181.50. Also, Hero MotoCorp, JSW Steel, PowerGrid and Tata Motors climbed up to 2.27 per cent.

In contrast, Kotak Mahindra Bank, BPCL, Eicher Motors, Axis Bank and Apollo Hospitals slipped up to 1.37 per cent.

The overall market breadth was strong as 1,841 shares were advancing while 819 were declining on BSE.

On the 30-share BSE index, NTPC, HDFC twins (HDFC and HDFC Bank), Reliance Industries, L&T and ICICI Bank were among the top gainers.

In addition, Aether Industries and Paytm jumped up to 6.86 per cent.

On the flip side, Hindustan Petroleum Corporation, Suzlon Energy and Lodha slipped up to 2.84 per cent.

The equity benchmarks had closed in on all-time highs yesterday. Sensex had gained 350 points, or 0.56 per cent, to end the session at 63,143 in the previous session, while Nifty had jumped 127 points, or 0.68 per cent, to settle at 18,726.

Nifty outlook

"A few oscillators have peaked, but then, this being the attending stage, such signals may mean less. Patterns and some of the momentum indicators point to further strength, encouraging us to enter the 18,750-18,887 regions with a positive frame of mind, despite penciling it as a potential consolidation region yesterday. For downside protection, 18,660 would certainly be enough as the marker, but should Nifty show reluctance to float above 18,700 today, the vulnerability of 18,660 would increase manifold in the coming days," said Anand James, Chief Market Strategist at Geojit Financial Services.

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