Sensex and Nifty Climb as Crude Oil Drops and RBI Policy Looms

Indian equity markets continued their upward momentum on Tuesday, supported by a decline in crude oil prices and optimism ahead of the Reserve Bank of India's upcoming monetary policy announcement. The benchmark indices recorded notable gains, with the Sensex climbing more than 685 points to settle at 73,068 and the Nifty 50 rising over 220 points to close at 22,776.

This rally came after an extended period of selling pressure, which had unsettled investors in recent weeks. The recovery was reinforced by a sharp drop in the India VIX, reflecting reduced market volatility, and Brent crude oil prices falling below the $100 per barrel threshold, easing concerns about inflation and input costs for businesses.

Market analysts highlighted the technical resilience of the Nifty, which maintained a position above the key 22,600 support level. Rupak De, Senior Technical Analyst at LKP Securities, pointed out that the index faces immediate resistance near 22,850. Should the Nifty convincingly move past this mark, the rebound may gain further strength. Conversely, failure to breach this resistance could prompt profit-taking and a possible pullback in the short term.

On the currency front, the Indian rupee remained under pressure, declining by 27 paise to 96.56 against the US dollar. Currency weakness continues to be a concern for the market, reflecting broader macroeconomic challenges and global dollar strength.

Meanwhile, the number of new demat accounts opened in September dropped to 2.89 million, marking an 11.5% month-on-month decrease. This slowdown in investor participation coincided with the sharpest monthly market decline in five months, leading to more cautious behavior among retail investors. Nevertheless, the cumulative addition of over 9 million accounts in the September quarter represented the highest quarterly inflow in nearly two years.

Globally, Asian stock markets held near record highs on Wednesday, buoyed by strong earnings outlooks and steady crude oil prices. Wall Street also gained ground on Tuesday, supported by easing US Treasury yields and stabilizing oil markets. Investors are now focused on the release of the Federal Reserve’s meeting minutes, which could provide guidance on future interest rate moves and monetary policy direction.

In commodities, gold prices showed little movement as traders awaited the Fed minutes, which may influence inflation expectations and impact precious metals. Oil prices edged higher amid concerns over supply disruptions from an approaching storm in the US Gulf of Mexico and recent attacks by Yemen's Houthi rebels on Saudi Arabian oil facilities. These geopolitical and weather-related risks balanced against reports of increased crude output from the Middle East.

On the corporate front, several companies including Titan, HCL Technologies, Adani Ports and Utkarsh Small Finance Bank remained in focus due to recent business updates and earnings announcements. These developments continue to shape market sentiment and investor positioning ahead of the RBI policy decision.

Looking ahead, the GIFT Nifty futures indicated a slightly negative start for Wednesday, trading down 34 points or 0.15% at 22,740. Investors are closely watching policy signals from the Reserve Bank of India, which will be a key factor in determining the near-term trajectory of the markets.

Overall, the combination of easing crude oil prices, positive corporate earnings, and anticipation of the RBI’s policy stance has helped Indian equities recover from recent losses. Market participants will be paying close attention to global economic cues and domestic policy announcements as they navigate the current phase of market volatility.