Indian Markets Brace for Policy Decisions

Indian stock markets experienced a robust rally on Monday, with the BSE Sensex and NSE Nifty closing significantly higher. The positive sentiment was bolstered by strong performances in global markets, including record highs for the Nasdaq Composite and advances in the Dow Jones Industrial Average and S&P 500. US futures and Asian markets also opened on a firm note, contributing to the supportive international environment.

Market participants are now keenly anticipating a series of crucial events in the coming days. Tuesday marks the Nifty weekly expiry, which could lead to short-covering rallies. The Reserve Bank of India's monetary policy decision is scheduled for Wednesday, followed by a GST Council meeting on Thursday. These events are expected to drive market sentiment and potentially influence trading volumes.

Despite the positive domestic and global cues, concerns persist regarding the US dollar index hovering near 102 and elevated 10-year US bond yields around 5.3 percent. Foreign institutional investors (FIIs) continued their selling trend in the cash market, though the overall selling pressure saw some easing. Conversely, domestic institutional investors (DIIs) maintained their consistent buying streak for the 38th consecutive session. Experts suggest that FII selling might moderate soon if current trends persist. The Nifty's support is seen around the 22,100-22,325 zone, with a close above 22,625 potentially reducing downside risk and a move above 22,850 signaling a return to a bullish trend.