Nifty gains 0.98% as bank updates and softer oil set up RBI-focused open

The October 6 advance extended the previous session’s rebound. Market reports linked the gains to buying in banks and consumer-facing shares, easing oil prices and supportive global cues, with traders also positioning ahead of the Reserve Bank of India’s policy decision.

Bank updates gave the move company-level support. Kotak Mahindra Bank reported year-on-year growth of 24.7% in net advances and 23.2% in deposits for the September quarter; Axis Bank reported year-on-year growth of 22.7% in advances and 20.7% in deposits. Trent reported a 23% year-on-year increase in standalone September-quarter revenue. These updates help explain the strength in bank and retail shares, though the session’s broad advance does not by itself establish a lasting change in sentiment.

Among individual shares, Trent was reported as a leading index gainer after its revenue update. Kotak Mahindra Bank and Axis Bank also advanced after reporting deposit and loan growth. Godrej Consumer Products said it expected consolidated revenue growth in the high teens for the September quarter; that was company guidance, not a reported result. Reports also linked Reliance Industries’ strength to expectations around a possible Jio Platforms listing, but that remains speculation rather than a confirmed transaction.

The reported sector pattern favoured banks, FMCG and retail shares, consistent with the lender updates and company revenue outlooks. IT shares were weak as the market looked ahead to the September-quarter reporting season and weighed growth, margins and technology-spending demand; TCS is due to report on October 8. Available reporting did not identify a specific catalyst for the supplied weakness in consumer durables or NBFC and insurance shares, so a single explanation for those moves cannot be established.

The easing in crude during the previous session was cited as a support for Indian equities, given the country’s exposure to imported energy. Oil had risen again by the pre-open on October 7, with reports attributing the rebound to attacks on shipping and persistent Middle East supply risks, despite signs of recovering flows. That leaves energy costs and the rupee relevant to the RBI’s inflation assessment.

US shares closed higher on October 6, with the S&P 500 and Nasdaq at record closes, while Asian markets were mixed early on October 7. Investors were also watching the Federal Reserve’s September meeting minutes due later on Wednesday. Exchange data reported provisional net foreign selling of Rs 2,961 crore in Indian equities on October 6, against net domestic institutional buying of Rs 5,089 crore. Domestic purchases cushioned foreign outflows, but the flow divergence remains a constraint on the durability of the rebound.

The RBI’s Monetary Policy Committee is due to announce its decision at 10 am on October 7, with the governor’s press conference scheduled for noon. Most economists and market participants cited in pre-policy reports expected a 25-basis-point increase from the current 5.25% repo rate to 5.50%; some analysts, including MUFG’s, expected no change. The decision and the RBI’s guidance on inflation and the path of policy rates are therefore the main domestic event risk for the session.

No new CPI, IIP, GST, trade or PMI release for the morning was identified in the material reviewed. Nor was a new SEBI or finance ministry announcement identified. The policy call is the key near-term test for rate-sensitive shares and bonds; the likely market response will depend not only on the rate decision but also on the RBI’s explanation of inflation and its future stance.

The RBI announcement is the first scheduled catalyst for the session. After that, attention turns to policy commentary, the movement in crude and the start of September-quarter results, with TCS due to report on October 8. Those events will help test whether the previous session’s company-led buying can broaden beyond selected domestic-facing shares.