Mixed Start Seen for Benchmarks as Nifty Edges Down and Sensex Increases at Pre-Open Ahead of RBI Policy

Mumbai, June 5: Nifty and Sensex diverged at pre-opensignalling a mixed start for benchmark indices as investors expect the central bank to keep its key interest rate unchanged today.

Nifty 50 traded 0.13% lower at pre-open while the Sensex increased 0.25% even as the Gift Nifty futures traded at 23,549, which is above Nifty 50’s previous close of 23,416.55.

The central bank will begin announcing its monetary policyfrom 10:00 a.m. as investors will parse the governor’s speech for clues and measures to take on inflationary pressures arising from oil boil. Markets will also be looking for any measures from the Reserve Bank of India on the rupee which has been on a stubborn slide.

Higher interest rates could lend support to the rupee and help contain inflationary pressures, but they may also increase borrowing costs for companies and consumers, potentially weighing on economic activity and equity valuations, thereby reducing the appeal of stocks for some.

Spotlight will be falling on rate-sensitive sectors such as financials, automobiles‌and real estate.

As for global cues, Asian stocks fell broadly as investors booked profits in artificial intelligence-linked shares after a stellar rally and assessed the implications of ongoing U.S.-Iran negotiations on global energy supplies.

Hong Kong’s Hang Seng slipped 0.8%, while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.6%. South Korea’s Kospi led regional losses with a 3.6% decline, Taiwan’s Taiex fell 0.8%, and Japan’s Nikkei shed 1.2%.

Investor caution was amplified by uncertainty surrounding a potential U.S.-Iran agreement. While diplomatic efforts are continuing, reports suggest significant differences remain, keeping markets on edge over the outlook for oil supplies from the region.

Oil prices rose about 0.8% on Friday, recovering from the previous session’s losses as traders weighed the prospects of a deal against the risk of prolonged geopolitical tensions. Firmer crude prices added to concerns over inflation and corporate costs across Asia.

The broader mood remained risk-off, with investors reluctant to make large bets ahead of further developments in the Middle East and key economic data due later in the day.

U.S. markets ended mixed overnight. The Dow Jones Industrial Average closed at a record high, supported by gains in financial and healthcare stocks, while the S&P 500 finished modestly higher.

Technology stocks, however, came under pressure after semiconductor giant Broadcom slumped following earnings that failed to meet elevated investor expectations. The selloff spread across chipmakers and AI-related counters, dragging the Nasdaq lower and prompting investors to reassess stretched valuations in the sector.

The weakness in technology shares also weighed on U.S. stock futures, setting a cautious tone for global markets.

European equities proved relatively resilient despite geopolitical concerns. The pan-European STOXX 600 index ended higher, supported by gains in healthcare and luxury stocks.

Technology shares mirrored the weakness seen on Wall Street, but broader market sentiment remained supported by company-specific gains and expectations around future monetary policy in the euro zone.

Investors continued to monitor developments in the Middle East, which remained a key driver of risk sentiment across global markets.

Source:

• Exchanges