Sensex down 300 pts, Nifty at 24,470 as CAS correction weighs; RBI MPC in focus

Mumbai, Aug 4: Indian equity benchmarks opened lower on Tuesday, with the Sensex shedding 300 points and the Nifty sliding 300 points to 24,470, as a correction in the CAS segment weighed on market sentiment. Investors are now turning their attention to the Reserve Bank of India's Monetary Policy Committee (MPC) meet outcome, which is expected to set the near-term tone for the markets.

CAS correction drags indices

The correction in CAS stocks, which had been a key driver of recent market rallies, pulled down the broader indices. The Nifty's fall to 24,470 marks a notable retreat from recent highs, with traders citing profit-booking and valuation concerns in the segment.

Market participants said the CAS correction was long overdue, given the sharp run-up in these stocks over the past few weeks. The selling pressure was broad-based, though banking and financial stocks helped limit the downside in early trade.

RBI MPC meet outcome in focus

The RBI's MPC is currently underway, with the outcome scheduled for later this week. Economists and market watchers expect the central bank to hold rates steady, but any commentary on inflation and liquidity will be closely parsed.

A dovish stance could provide a fresh boost to equities, while a hawkish surprise may extend the current correction. The MPC's decision on the repo rate and its forward guidance will be critical for market direction in the coming sessions.

Global cues remain mixed, with overnight gains in US markets offering some support, but crude price movements and geopolitical developments continue to influence investor risk appetite.

What to watch in the session

Analysts suggest that the Nifty's ability to hold above 24,400 will be key in the near term. A close below that level could trigger further selling, while a rebound above 24,600 may signal consolidation.

Foreign institutional investor flows, the rupee's movement against the dollar, and any fresh triggers from the MPC will likely dictate the market's next move.

The coming days will hinge on the RBI's policy stance and whether the CAS correction deepens or stabilises. Investors are advised to stay nimble as volatility is expected to remain elevated.