Sensex Drops 56 Pts After RBI Cuts Growth Forecast
By Rediff Money Desk, Mumbai Dec 06, 2024 17:08
Indian stock markets snapped their 5-day winning streak as the Reserve Bank of India lowered its growth projection for 2024-25. Sensex closed 56 points lower, while Nifty dipped 30.60 points. RBI kept policy rates unchanged but cut the Cash Reserve Ratio to inject liquidity into the system.
Mumbai, Dec 6 (PTI) Snapping the five-day winning run, benchmark Sensex dropped by 56 points in a highly volatile trade on Friday after the Reserve Bank cut the growth projection for 2024-25 and kept the policy rates unchanged.
After oscillating between highs and lows during the day, the 30-share BSE benchmark Sensex declined 56.74 points or 0.07 per cent to settle at 81,709.12. Intra-day, it swung 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 per cent.
The NSE Nifty dipped 30.60 points or 0.12 per cent to settle at 24,677.80.
The Reserve Bank of India on Friday 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 per cent -- 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 per cent 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 per cent, effective in two tranches on December 14 and 28.
The cut will infuse Rs 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 had been rising for the past five trading sessions and hence a small breather was expected. With RBI springing no major surprise in its credit policy announcement, investors booked profit in 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 Rs 8,539.91 crore on Thursday, according to exchange data. The BSE smallcap gauge climbed 0.60 per cent and midcap index shot up by 0.36 per cent.
Among sectoral indices, metal jumped 1.17 per cent, consumer durables (1.16 per cent), auto (0.92 per cent), services (0.82 per cent) and consumer discretionary (0.63 per cent).
Teck, BSE Focused IT and IT were the laggards.
On the weekly basis, the BSE benchmark jumped 1,906.33 points or 2.38 per cent and the Nifty climbed 546.7 points or 2.26 per cent.
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. US markets ended lower on Thursday.
"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 Rs 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 per cent to USD 71.76 a barrel.
After oscillating between highs and lows during the day, the 30-share BSE benchmark Sensex declined 56.74 points or 0.07 per cent to settle at 81,709.12. Intra-day, it swung 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 per cent.
The NSE Nifty dipped 30.60 points or 0.12 per cent to settle at 24,677.80.
The Reserve Bank of India on Friday 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 per cent -- 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 per cent 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 per cent, effective in two tranches on December 14 and 28.
The cut will infuse Rs 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 had been rising for the past five trading sessions and hence a small breather was expected. With RBI springing no major surprise in its credit policy announcement, investors booked profit in 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 Rs 8,539.91 crore on Thursday, according to exchange data. The BSE smallcap gauge climbed 0.60 per cent and midcap index shot up by 0.36 per cent.
Among sectoral indices, metal jumped 1.17 per cent, consumer durables (1.16 per cent), auto (0.92 per cent), services (0.82 per cent) and consumer discretionary (0.63 per cent).
Teck, BSE Focused IT and IT were the laggards.
On the weekly basis, the BSE benchmark jumped 1,906.33 points or 2.38 per cent and the Nifty climbed 546.7 points or 2.26 per cent.
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. US markets ended lower on Thursday.
"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 Rs 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 per cent to USD 71.76 a barrel.
Source: PTI
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