Sensex Jumps 685 Points, Nifty Reclaims 22,750 Ahead of RBI Policy Outcome

Indian equity benchmarks ended sharply higher on Tuesday, with the Sensex gaining 685 points and the Nifty reclaiming the 22,750 level as investors bought shares across pharmaceutical, private banking and oil and gas sectors ahead of the Reserve Bank of India's policy decision.

The Sensex climbed 685.34 points, or 0.95 per cent, to close at 73,067.81, while the Nifty advanced 220.35 points, or 0.98 per cent, to settle at 22,776.10.

Market participants largely remained focused on the RBI's upcoming policy announcement for indications on interest rates, liquidity conditions and the central bank's assessment of the economy.

Buying in heavyweight stocks helped the benchmarks maintain positive momentum throughout the session, while gains also extended to the broader market.

The Nifty MidCap index rose 1.08 per cent, while the Nifty SmallCap index gained 1.56 per cent, outperforming the headline indices.

Among Nifty constituents, Trent, BSE and Kotak Mahindra Bank were among the leading gainers and contributed significantly to the day's advance.

At the sectoral level, pharmaceutical and chemical stocks led the rally. The Nifty Pharma index emerged as the best-performing sectoral index, followed by the Nifty Chemical index.

Information technology stocks, however, faced some profit booking, making the Nifty IT index the biggest sectoral laggard during the session.

On the technical front, market analysts said a sustained move above 22,800 on the Nifty could open the possibility of a move towards the 23,000 level.

The immediate downside support was identified around 22,600, followed by 22,500. Analysts noted that the Relative Strength Index had moved into the mid-30s, indicating some improvement in momentum, while the MACD histogram had eased further from negative territory, suggesting that selling pressure was moderating.

Market sentiment was also supported by optimism around domestic equities and expectations ahead of the RBI policy announcement, although global uncertainties continued to pose risks.

Analysts said the near-term market outlook remained cautiously positive, with declining crude oil prices providing additional support and helping the benchmarks recover for a second consecutive session.

However, they cautioned that the recent rebound could still face pressure from broader macroeconomic risks as investors await fresh signals from the RBI and global markets.