Shares Decline At Pre-Open As Benchmarks Set For Lower Start Ahead Of RBI

Mumbai, October 7: Indian shares declined at pre open signalling a lower start for benchmarks as traders price in a rate hike announcement by the central bank later in the day. 

Nifty 50 declined 0.3% and Sensex declined 0.2% at pre open.  

The Reserve Bank of India is widely expected to raise its policy rate by 25 basis points, marking its first rate increase since February 2023. Investors will closely track Governor Sanjay Malhotra’s comments on inflation risks for clues on the central bank’s approach to further rate hikes. Since the RBI kept rates unchanged on August 5, the Nifty 50 has declined 7.5%, weighed down by higher crude oil prices, rising US Treasury yields amid inflation concerns and sustained foreign investor selling.  

Titan Company, a jeweller, reported a 25% year-on-year increase in consumer business sales in the September quarter, supported by growth across its jewellery, watches and eyewear businesses. Utkarsh Small Finance Bank: Total deposits rose 6.6% year-on-year in the second quarter, while total disbursements increased 54.9%.  

Asset Reconstruction Company’s consolidated net profit rose 54.2% year-on-year in the June quarter.  

Mphasis, an IT services company, won a 35.4-million-euro contract from Social Security Scotland. 

Asian Markets Decline 

Asian stocks traded largely lower in early trade, with investors assessing the impact of elevated oil prices and lingering concerns over inflation and interest rates. Japan’s Nikkei was down 0.9%, while MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.5%. Chinese markets remained shut for a holiday. 

The subdued regional mood came despite a positive session on Wall Street, where the S&P 500 and Nasdaq closed at fresh record highs. The Dow Jones Industrial Average also advanced, as easing US Treasury yields and expectations of lower interest rates supported risk appetite. 

Wall Street Rallies To Record Highs 

On Tuesday, the Dow Jones Industrial Average rose 253.14 points, or 0.49%, to 51,521.04. The S&P 500 gained 45 points, or 0.58%, to 7,818.95, while the Nasdaq Composite climbed 122.48 points, or 0.45%, to 27,599.79. 

Technology and AI-linked stocks remained key drivers of the rally, with investors increasingly turning their attention to the upcoming third-quarter earnings season. Markets are also pricing in a sharply lower probability of another Federal Reserve rate hike this month, with expectations falling to around 19% from more than 50% a week earlier. 

US Treasury yields eased after recently hitting multi-year highs, providing further support to equity valuations. The 10-year Treasury yield fell around 3 basis points to 5.28%, while the 30-year yield slipped to 5.65%. 

Oil Prices Rise 

Crude oil, however, remains a key risk for global markets. Brent crude was around $101.4 a barrel, while West Texas Intermediate was about $90.12. Prices moved higher in early Asian trade on Wednesday as traders assessed the threat of supply disruptions from a storm approaching US oil-producing regions and continued attacks in the Middle East. 

The US Energy Information Administration has also raised its oil-price forecasts, citing rapidly falling global inventories and tight diesel markets. It expects Brent to average around $105 a barrel in the fourth quarter. 

Source

•  Exchanges