Nifty50, Sensex started this week on a negative note ahead of RBI’s policy meeting

Equity markets started the week on a negative note and are expected to remain volatile for the entire week ahead of the RBI’s monetary policy meeting which will decide the course of the market.

The Sensex lost 561 points to stand at 57,528 levels, while the Nifty50 fell 180 points to 17,147 on Monday.

In the past five days, the Sensex has already lost nearly 3%, or 1,560 points, on weak global cues led by the US Fed signaling aggressive rate hikes ahead.

Further, the RBI is widely expected to follow suit and raise interest rates on September 30. The RBI has already raised interest rates by a total of 140 basis points three times in a row.

“Global stimuli are expected to dominate this week but RBI policy and September F&O expiry will lead to volatility in our market. US GDP and unemployment numbers will be important. If we look at the F&O data, FII’s short exposure in index futures has jumped to 80%, which means sentiment is weak but the market is assured,” said Santosh Meena, head of research at Swastika Investmart.

Adding to the woes, the rupee continues to fall, touching 81.52 on September 26, amid tightening monetary policy by central banks and concerns over India’s record trade deficit. It is expected to touch 82 levels.

“We expect volatility to remain high as we have important events scheduled throughout the week such as the MPC’s monetary policy review and monthly derivatives expiry. Furthermore, prevailing pressure in global indices will continue to weigh on sentiment. Markets seem to be finally giving way to pressure from global indices, especially the US, and are likely to move lower further,” said Ajit Mishra, vice-president, research at Religare Broking.

All sectoral indices traded in the red as weakness was witnessed across the board. Power Grid Corporation of India and Hindalco Industries were the biggest laggards on the Nifty50.

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