Indian indices surrendered early gains on Monday as selling pressure hit IT stocks and HDFC Bank. Investor sentiment remains cautious ahead of the Reserve Bank of India’s upcoming monetary policy decision, where a 25-basis-point interest rate hike is widely expected.
Indian equity markets struggled to sustain their early momentum on Monday, October 5, 2026. While both the Nifty 50 and the Sensex opened the session in the green, the indices pared their gains as the trading day progressed. The shift in sentiment was driven largely by volatility in two key sectors: banking and information technology.
HDFC Bank and Leadership Transition
HDFC Bank emerged as a central point of interest for investors. Despite reporting a strong business update, with advances growing 16.3% and deposits increasing by 18.8%, the stock faced downward pressure during the session. This volatility highlighted a cautious approach from investors who are weighing the strong business performance against broader market headwinds. Separately, the bank announced that Anup Bagchi has been appointed as the new Managing Director and CEO, with approval from the Reserve Bank of India for a three-year term beginning October 27, 2026. Market observers will be looking to see how this leadership transition aligns with the bank’s long-term strategy.
IT Sector Headwinds
The IT sector also acted as a drag on the broader market. Shares of major players, including HCL Technologies, faced selling pressure throughout the day. The sector continues to grapple with persistent challenges, including pricing pressure and intense competition, which have limited the ability of these stocks to hold onto recent gains. The negative sentiment in IT offset the earlier optimism that had permeated the market.
RBI Policy Focus
The overarching theme for the market this week is the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting, scheduled to take place from October 5 to October 7. A 25-basis-point hike in the repo rate to 5.50% is the dominant expectation among market analysts. This anticipation of higher borrowing costs is keeping liquidity and market sentiment defensive. The combination of monetary policy uncertainty and a weaker Indian rupee—which has raised concerns about import costs and inflation—has led investors to adopt a wait-and-watch approach.
Technical Resistance Levels
From a technical standpoint, the market appears to be facing a firm resistance zone. Analysts have observed significant call writing activity at the 22,500 and 22,600 levels on the Nifty 50. As long as the index remains below these thresholds, traders are likely to see continued consolidation. Immediate support levels are being monitored between 22,320 and 22,340. The next major trigger for market direction will be the official policy statement from the Reserve Bank of India on Wednesday, October 7, which will clarify the path for interest rates and the central bank's stance on inflation.