Nifty, Sensex open lower as markets await RBI MPC decision today

Mumbai: Domestic equity markets opened lower on Wednesday as investors turned cautious ahead of the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) decision, due later today.

The Nifty 50 opened at 22,690.45, down 85.65 points, or 0.38 per cent, while the BSE Sensex opened 102.43 points lower at 72,965.38, a decline of 0.14 per cent. Both indices extended their losses shortly after the opening bell.

The market's focus is now on the RBI's policy decision and Governor's comments on the outlook for inflation, growth and interest rates.

The three-day MPC meeting, which began on October 5, concludes on Wednesday. The central bank had kept the repo rate unchanged at 5.25 per cent in August and maintained a neutral stance, citing the need for greater clarity on inflation and growth.

Economists are divided on whether the RBI will raise rates immediately or wait until its December meeting. Some expect a tightening cycle of up to 75 basis points amid rising inflation and global uncertainty.

Crisil Chief Economist Dharmakirti Joshi has backed a 25-basis-point rate hike at the current meeting, citing strong domestic growth and rising global interest rates.

Deloitte Chief Economist Rumki Majumdar, however, said a rate increase could come later in the year, with December also a possibility.

Bank of Baroda Chief Economist Madan Sabnavis expects the RBI to hold rates for one more policy meeting before beginning a tightening cycle in December. He expects three 25-basis-point hikes over the coming months, potentially taking the repo rate to around 6 per cent.

Banking and market expert Ajay Bagga said the MPC is meeting amid a significant shift in macroeconomic conditions. He noted that the RBI had cut the repo rate by a cumulative 125 basis points during 2025 before keeping it unchanged for four consecutive reviews.

He also pointed to inflationary pressures, with CPI inflation rising to 4.82 per cent in August, above the RBI's 4 per cent target for a third consecutive month. WPI inflation stood at 9.92 per cent.

Rising crude oil prices are another concern, with Brent crude trading above $100 a barrel. The rupee has also weakened around 6 per cent this year, adding to pressure on the central bank.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the recent 558-point rally in the Nifty from last Thursday's low had offered some relief to investors, but the market could face further headwinds.

"Brent crude is back above USD 101 and there are no signs of a reversal in FPI outflows," Vijayakumar said, while noting that domestic liquidity and expectations of strong second-quarter earnings were supporting the market.

Among NSE sectoral indices, Nifty Media was the only major index to open in positive territory, gaining 0.66 per cent. Nifty Auto fell 0.52 per cent, FMCG declined 0.43 per cent, IT dropped 0.51 per cent, Metal lost 0.59 per cent and Oil and Gas fell 0.49 per cent.

Among Nifty 50 stocks, Dr Reddy's, Cipla, Bharti Airtel and Coal India were among the early gainers, while Titan, SBI Life, Asian Paints, M&M and IndiGo were among the laggards.

The RBI's policy announcement later today is expected to provide fresh direction to the markets, with investors closely watching the interest-rate decision and the central bank's assessment of inflation, liquidity and economic growth.