Indian Markets Edge Higher as RBI Policy Decision Looms

The NSE Nifty 50 climbed 62.40 points to open at 23,478.95 on Friday, while the BSE Sensex rose 269.93 points to 74,629.94. Investors are balancing optimism over potential tax relief for foreign portfolio investors against a cautious outlook ahead of the Reserve Bank of India's impending monetary policy announcement.

Market sentiment remains buoyed by reports that the government is weighing a new ordinance to provide tax relief for Foreign Institutional Investors in sovereign bonds. Banking analyst Ajay Bagga suggests this move could invigorate bond markets even as the central bank maintains a vigilant stance. Expectations for the RBI’s 10 a.m. briefing center on a likely interest rate pause coupled with a hawkish tone, potentially accompanied by upward revisions to inflation forecasts and adjustments to GDP projections.

Sectoral performance reflects this guarded optimism, with Nifty Media leading gains at 1.53 percent, alongside positive momentum in Realty, Pharma, IT, and Auto. Conversely, Metal and Private Bank indices have slipped into negative territory. This domestic resilience contrasts with broader Asian markets, where the KOSPI index tumbled 4.83 percent and Japan’s Nikkei 225 fell 1.61 percent. Brent crude prices ticked upward to USD 95.37 per barrel, adding another layer of complexity to the day's trading environment as participants monitor global AI stock trends and geopolitical developments.