NIFTY50, SENSEX today: RBI MPC decision, US-Iran ceasefire, FII activity, key things to know before markets open on April 8

The Indian equity benchmarks are set to stage a gap up opening on Wednesday, April 8, as indicated by GIFT NIFTY futures. NIFTY futures at GIFT City in Ahmedabad surged 663 points to 23,815 amid strong cues from Asian markets as signs of de-escalation emerged from war between United States and Iran.

The Indian equity benchmarks rose for a fourth straight session on Tuesday, April 7, led by gains in index heavyweights like Infosys, Bharti Airtel, ICICI Bank, Tata Consultancy Services and HCL Technologies. The NIFTY50 index surpassed its important psychological level of 23,000 and SENSEX surged as much as 1,403 points from the day's lowest level.

The SENSEX ended 510 points higher at 74,617 and NIFTY50 index ended 155 points higher at 23,124.

Iran war update

President Donald Trump has agreed to a two-week ceasefire with Iran, less than two hours before his deadline for Tehran to reopen the Strait of Hormuz or face devastating attacks on its civilian infrastructure in which he had threatened 'a whole civilization will die'.

Iran said talks between the US and Iran would begin on Friday in Islamabad, Pakistan, whose prime minister helped mediate the ceasefire. The US has not yet confirmed in-person talks but says they are being discussed, news agency Reuters reported.

Crude oil update

Following the announcement of two-week ceasefire prices of crude oil prices dropped below $100 per barre. Brent Crude in international markets fell as much as 16% to hit an intraday low of $91.72 per barrel.

Asian markets

Equity markets across Asia were trading sharply higher on Wednesday after Trump said Iran had ‌presented a ⁠10-point proposal that was a "workable basis" for negotiations and he expected an agreement to be "finalized and consummated" during the two-week window.

Trump said the last-minute deal was subject to Iran's agreement to pause its blockade of oil and gas supplies through the strait. Iran's Foreign Minister, Abbas Araqchi, said in a statement Tehran would stop counter-attacks and provide safe passage through the strait.

Iranian state TV said Trump had accepted Iran's terms for ending the war, describing it as a "humiliating retreat" by the U.S. president.

Japan's Nikkei jumped 5%, Australia's S&P/ASX 200 index gained 2.5%, China's Shanghai Composite index surged 1.7%, Hong Kong's Hang Seng index advanced 2.6% and South Korea's KOSPI index rose 6%.

Wall Street update

Overnight, US stocks ended on a flat note ahead of ceasefire announcement. Dow Jones Industrial Average declined 0.18%, S&P 500 index rose 0.08% and tech heavy Nasdaq ended 0.1% higher.

Expectations from RBI's Monetary Policy Committee

The Reserve Bank of India's Monetary Policy Committee (MPC) is widely expected to keep the benchmark repo rate unchanged at 5.25% amid heightened global uncertainties.

A poll of over a dozen economists indicated that persistent geopolitical tensions in West Asia, elevated crude oil prices, currency volatility and risks to inflation are likely to prompt the RBI to keep the pause for now, even as it reassesses its growth and inflation outlook.

“Given the uncertainty around crude oil prices and geopolitical developments, the RBI is likely to remain on pause in the April policy and closely monitor incoming inflation data before taking any further action,” said Aditi Nayar, Chief Economist at ICRA.

The policy review comes at a time when global crude oil prices have surged past USD 100 per barrel following the escalation of conflict in West Asia, raising concerns about imported inflation.

The rupee has also weakened sharply, hovering above 93 against the US dollar.

SBI Chief Economist Soumya Kanti Ghosh said the RBI will be careful in communicating its decision.

“India is not unscathed from the current crisis and is feeling the mercury rising. Rupee is already hovering above 93 per dollar, and crude oil is adamant above USD 100 per barrel, resulting in a jump in imported inflation across states,” he said.

FII/DII activity

Foreign institutional investors sold shares worth ₹8,692 crore on Tuesday while domestic institutional investors bought shares worth ₹7,979 crore, data from the National Stock Exchange showed.

The FIIs have so far this month sold shares worth ₹37,944 crore, data compiled by the National Securities Depository Limited (NSDL) showed.

Stocks to watch

The prices saw a sharp drop after US President Donald Trump announced a two-week ‘double-sided ceasefire’ deal with Iran in the sixth week of the US-Iran conflict.

A fall in crude oil prices is positive for India as the country imports the majority of its oil needs, so lower prices reduce the import bill and help narrow the current account deficit (CAD).

The government will select a maximum of five entities through the bidding, with each entity setting up facilities of up to 1,200 MTPA, aggregating to a total of up to a maximum capacity of 6,000 MTPA.

The onboarding of Punjab National Bank as a lending partner on the GeM Sahay Portal offers multiple benefits to sellers by enabling quick access to collateral-free short-term loans against GeM purchase orders, thereby improving liquidity and easing cash flow challenges, PNB said in a statement.

This partnership particularly empowers MSMEs and small businesses that often face challenges in accessing timely and affordable formal credit, while ensuring transparency and efficiency through digital, paperless loan processing, it said.

Trade setup

The index maintained the bullish momentum for the third consecutive session and closed above the 20 and 50 EMA levels. On the hourly chart, a positive bullish crossover of 20 EMA and 50 EMAs indicates positive momentum. Considering all other things as constant, a positive opening on Wednesday could push the index higher towards 23,300 levels.

On the long-term charts, 23,500 remains a crucial resistance and 22,500 as the immediate support for the index.

A close above the immediate resistance zone can lead to a short-covering rally, pushing the index towards the next resistance zones of 23,500 and 23,850. In the short-term, 22,500 and 22,800 zones can act as support.