Equity benchmarks declined in early trade on Friday as investors turned cautious ahead of the Reserve Bank of India's monetary policy announcement later in the day. A subdued global sentiment and continued foreign fund outflows contributed to the pullback.
The BSE Sensex fell by 159.93 points to 81,282.11 in early deals, while the broader NSE Nifty dropped 27.65 points, settling at 24,723.25.
Among the laggards on the 30-share Sensex were Tata Motors, Bajaj Finance, ICICI Bank, Bajaj Finserv, Reliance Industries, and Bharti Airtel. Conversely, IndusInd Bank, Tata Steel, Adani Ports, Mahindra & Mahindra, and Larsen & Toubro were trading with gains.
The Reserve Bank is widely expected to reduce the key interest rate by 25 basis points, a move already priced in by the markets, according to analysts.
"In today’s monetary policy the RBI is likely to cut policy rates by 25 bps. This is already factored in by the market. More important will be the RBI commentary on growth and inflation projections for FY26," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Asian markets were mixed in early trade. South Korea’s Kospi and Japan’s Nikkei 225 were trading in the green, while the Shanghai Composite and Hong Kong’s Hang Seng Index slipped marginally.
Also read: Global shares rise as Wall Street loses steam
On Wall Street, stocks ended lower on Thursday, reflecting caution ahead of Friday's key jobs data from the United States.
In domestic markets, sentiment was also weighed down by sustained selling from overseas investors. Foreign Institutional Investors (FIIs) offloaded equities worth ₹208.47 crore on Thursday, as per exchange data.
"For Indian equities, the immediate focus shifts to two key events: the RBI policy meeting and the US May jobs report," said Prashanth Tapse, Senior Vice-President (Research), Mehta Equities Ltd.
Meanwhile, global crude oil prices edged down, with Brent crude slipping 0.29 per cent to USD 65.15 a barrel.
On Thursday, Indian equities had seen a robust rally. The Sensex rose by 443.79 points or 0.55 per cent to close at 81,442.04, while the Nifty ended 130.70 points or 0.53 per cent higher at 24,750.90.
The focus now shifts to the RBI’s monetary policy stance and its outlook for inflation and economic growth, both of which are likely to guide market direction in the coming weeks.
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