Benchmark equity indices Sensex and Nifty ended marginally lower in a highly volatile trade on Friday (December 6, 2024), snapping their five-day rally, after the Reserve Bank of India kept the policy rate unchanged but sharply cut the FY25 GDP growth forecast.
After oscillating between highs and lows during the day, the 30-share BSE benchmark Sensex declined 56.74 points, or 0.07% to finally settle at 81,709.12. Intra-day, it gyrated 419.72 points, hitting a high of 81,925.91 and a low of 81,506.19.
In the past five trading days, the BSE benchmark jumped 2,722.12 points, or 3.44%.
The NSE Nifty dipped 30.60 points, or 0.12%, to settle at 24,677.80.
The Reserve Bank of India on Friday (December 6, 2024) kept its key interest rate unchanged, citing inflation risks, but cut the Cash Reserve Ratio that banks are required to park with the central bank, boosting money with lenders to support a slowing economy.
With India’s GDP seeing a sharper-than-anticipated dip in the July-September period to 5.4% — its slowest pace in seven quarters — inflation on the uptick and rupee under pressure, the Reserve Bank of India (RBI) had few choices to make.
Its monetary policy committee, which consists of three RBI and an equal number of external members, kept the repurchase or repo rate unchanged at 6.5% for a record 11th meeting in a row.
From the 30-share pack, Adani Port, Bharti Airtel, Asian Paints, IndusInd Bank, Bajaj Finserv, Reliance Industries, Infosys, UltraTech Cement, HDFC Bank, HCL Technologies, and ICICI Bank were among the laggards.
Tata Motors, Axis Bank, Maruti, Larsen & Toubro, ITC, and Tata Steel were among the gainers.
RBI Governor Shaktikanta Das said the Cash Reserve Ratio has been cut by 50 basis points to 4%, effective in two tranches on December 14 and 28.
The cut will infuse ₹1.16 lakh crore into the banking system and soften short-term interest rates. It will also reduce the pressure on bank deposit rates.
“Markets have been rising for the past five trading sessions, and hence a small breather was expected. With the RBI springing no major surprise in its credit policy announcement, investors booked profit on select frontlines.
“Although the undertone remains that of caution, the return of FIIs into local equities through select bullish bets has come as a major reprieve to investors,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.
Foreign Institutional Investors (FIIs) bought equities worth ₹8,539.91 crore on Thursday (December 5, 2024), according to exchange data.
In Asian markets, Seoul and Tokyo settled lower, while Shanghai and Hong Kong ended in the green.
European markets were trading on a mixed note. The U.S. markets ended lower on Thursday (December 5, 2024).
“Though benchmark indices concluded on a flattish trend, Indian broader indices displayed optimism as the RBI acknowledged the downward growth trend while last-mile inflation persisted.
“By lowering the CRR and injecting ₹1.16 lakh crore into the financial system, the RBI aims to stimulate economic growth amid increased liquidity. The overall market exhibited a mixed outlook, reflecting a cautious yet resilient stance, with sector rotation and specific stock movements shaping market sentiment,” Vinod Nair, Head of Research, Geojit Financial Services, said.
Global oil benchmark Brent crude dipped 0.46% to $71.76 a barrel.
Rallying for the fifth day running, the 30-share BSE benchmark jumped 809.53 points, or 1%, to settle at 81,765.86 on Thursday (December 5, 2024). The Nifty surged 240.95 points, or 0.98%, to 24,708.40.
Published – December 06, 2024 04:44 pm IST