The Indian stock market opened on a weaker note on Friday, slipping into the red as global cues and sustained foreign investor selling weighed on sentiment. The Nifty50 dipped below the 24,800 mark in early trade, while the BSE Sensex fell over 170 points. By 9:17 AM, the Nifty50 was at 24,775.70, down 61 points or 0.24%, and the Sensex was at 80,808.71, lower by 175 points or 0.22%.

RBI Policies and Festive Demand Offer Support

Despite the weak start, analysts say there are still reasons for investors to stay optimistic. Supportive monetary policies, forecasts of a good monsoon, and the approaching festive season are expected to provide momentum to key sectors.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the Reserve Bank of India's latest measures as a positive for financial stocks.“The RBI's bold initiatives to accelerate credit growth have the potential to sustain momentum, particularly in Bank Nifty,” he said.

FIIs vs DIIs: The Tug of War

Foreign Institutional Investors (FIIs) continue to pose challenges for the market.“FIIs are likely to step up their selling, given the current market construct. The large short positions in the market suggest bulls will remain defensive. That said, aggressive domestic institutional investor (DII) buying can lend some support, especially in large-cap auto stocks,” Vijayakumar noted.

On Wednesday, FIIs sold shares worth Rs 1,605 crore, while DIIs stepped in strongly with net purchases of Rs 2,916 crore.

Autos and Banks Remain Bright Spots

Autos and banks are likely to drive resilience in the near term. Auto companies are riding high on large order books and rising sales, while stronger banks are expected to benefit from higher credit growth and lower deposit insurance premiums. According to Vijayakumar, fairly valued large-cap banks remain attractive for medium- to long-term investors.

Global Cues and Oil Prices

Globally, markets offered mixed signals. Wall Street closed at record highs on Thursday, led by technology stocks, even as investors monitored U.S. government shutdown concerns. Asian equities mirrored modest gains on Friday morning, supported by optimism around artificial intelligence-driven growth.

Oil prices ticked up slightly after four straight days of losses but are still on course for their biggest weekly fall since June, as traders brace for possible increased output from OPEC+ and oversupply risks.

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