Sensex opens 453 points higher, ending an eight-week slide that cut the Nifty 8.7 percent

Indian equities opened higher on Monday after eight straight losing weeks. At 9:25 a.m. the Sensex was up 453.04 points, or 0.63 percent, at 72,362.74. The Nifty 50 was up 125.75 points, or 0.56 percent, at 22,547.70. Banks, metals, and oil and gas led. Healthcare, pharmaceuticals and information technology lagged. India VIX sat at 14.45, little changed on the morning, and up 35.3 percent over 30 days.

The eight-week run is the longest losing streak for the benchmarks in 25 years. Over those weeks the Nifty fell 8.7 percent and the Sensex 8.4 percent. Last week alone the Nifty lost 3.1 percent and the Sensex 2.7 percent, the steepest weekly drops in more than six months and more than four months respectively. On Friday, breadth was negative: 2,916 stocks fell, 1,306 rose, and 191 were unchanged. The Nifty Midcap index fell 1.1 percent and the Smallcap index nearly 1 percent. Monday's open is a rebound from that tape, not a repair of it.

What the open was following

Dealers pointed to a firmer Asian session, a higher Wall Street close on Friday, and easier oil. The Asian lead included a Nikkei that had cleared 70,000 in the morning after a U.S. payrolls report of 29,000 new jobs in September. China and South Korea were shut for holidays, so the regional bid was Tokyo and Hong Kong rather than a full Asian open. The Nifty's 125-point gain at 9:25 a.m. is smaller, in percentage terms, than Tokyo's 2.4 percent afternoon rise. The two markets were trading the same American jobs print and a different local calendar.

The local calendar is the Reserve Bank's monetary policy committee, which meets from 5 to 7 October and is due to announce on Wednesday morning. The repo rate stands at 5.25 percent. A BusinessLine poll of forecasters, published as the meeting opened, found a majority looking for a 25 basis point rise this week and a larger share looking for 50 to 75 basis points of tightening by the end of the financial year. That poll is an expectation, not a decision. It is why VIX can be flat on the morning and still be up a third in a month.

Who led the first hour

Financials, ITC, NTPC and Grasim were among the Nifty leaders. Bajaj Finance rose 3.32 percent, or 31.50 rupees, to 979.80, after a board approval on Thursday of a capital raise of up to 17,500 crore rupees. The stock had touched 982.80. Healthcare, information technology and Eternal led the declines. The split is the useful detail in a 453-point open: banks and a capital-raise name up, drug and software names down, ahead of a rate decision that a poll says is more likely to tighten than to hold.

Foreign portfolio investors sold about $2.7 billion of Indian equities in September, the largest monthly outflow in six months. Foreign-exchange reserves fell by $18.34 billion to $747.56 billion in the week ended 25 September, on RBI data reported on 2 October. Neither figure moved on Monday morning. Both sit under a market that has just had its longest weekly losing run in a quarter of a century and has opened the next week higher. Wednesday's rate line is the next number that can change the open.