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India Stocks Review: End at new highs after MPC meet; fincl shrs lead

Informist, Friday, Dec 8, 2023

 

By Anjana Therese Antony

 

MUMBAI – With the Reserve Bank of India maintaining status quo on key interest rates and raising India’s growth estimate for the current fiscal, investors cheered again, pushing the benchmark indices to new all-time and closing highs. Gains in the session were led by banking and financial stocks.

 

During the session, the Nifty 50 crossed the psychologically important level of 21000 points for the first time.

 

The central bank retained the repo rate at 6.50% and raised its projection for India’s GDP growth in 2023-24 (Apr-Mar) by 50 basis points to 7.0% from 6.5% earlier, after higher-than-expected growth of 7.6% in Jul-Sep.

 

It also allowed reversal of liquidity facilities under the standing deposit facility and the marginal standing facility during weekends and holidays with effect from Dec 30.

 

“Allowing reversal of the liquidity adjustment facility on holidays and weekends will enable banks to better manage customer flows,” said Zarin Daruwala, cluster chief executive officer, India and South Asia markets, Standard Chartered Bank, in a note. “This move also aligns well with the RBI’s 24×7 payments framework.”

 

The boost from the RBI, coupled with positive cues from the global markets, falling US Treasury yields, declining oil prices, and India’s strong macroeconomic fundamentals supported the positive sentiment, a few research analysts said. However, the Indian market is in an overbought zone, which also makes them cautious about a possible correction in the near term.

 

Intraday, the Nifty 50 and the BSE Sensex scaled new highs of 21006.10 points and 69893.80 points, respectively. The Nifty 50 closed 0.3% up at 20969.40 points and the Sensex ended 0.4% higher at 69825.60 points. Though selling for profit was seen in some sectors, the indices managed to regain strength in the latter part of the session. Support for the 50-stock index is pegged at 20800-20700 points and resistance is seen at 21100 points.

 

The broader market indices, which also hit record highs, saw selling for profit and closed lower. The Nifty mid-cap and small-cap indices closed lower by 0.1-1.1%.

 

“Valuations are decent and not very cheap,” said Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers. “I don’t think markets will rise much from here. Flows are good.”

 

Gains in banking and financial stocks propelled the 50-stock index. Shares of HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Axis Bank were the major performers in the pack.

 

All indices relating to the financial space–Nifty Bank, Nifty Private Bank, Nifty PSU Bank, and Nifty Financial Services–hit lifetime highs after the policy outcome and closed 0.2-1.0% higher. 

 

“Less hawkish commentary in consecutive policy statements seems to be taking us closer to rate cuts by H2CY2024 (Jul-Dec),” said Paritosh Kashyap, president and head of wholesale banking at Kotak Mahindra Bank.

 

However, the central bank refrained from giving forward guidance on interest rates “due to uncertainty”. The risk of “overtightening” monetary policy should not be interpreted as a signal that the MPC or the RBI will move in the opposite direction, the central bank’s Governor Shaktikanta Das said.

 

With respect to foreign inflows in the Indian equity market, G. Pradeepkumar, chief executive officer of Union Asset Management Co, said in a note that “the net flow into equity funds continues to be robust on the back of encouraging macroeconomic numbers and corporate earnings growth”.

 

On the sectoral front, at least 10 indices hit record highs after the policy announcement, but then witnessed selling for profit.

 

Shares of information technology companies also inched higher today, tracking the trend among their US peers. Gains in the sector provided support to the Indian benchmark indices, contributing to nearly 0.2% gain in the Nifty 50. All constituents of the Nifty IT index closed in the green, with HCLTech, LTIMindtree, and Infosys being the top-gaining constituents.

 

On the other hand, losses in fast-moving consumer goods stocks capped the potential gains in the overall market. These stocks witnessed selling for profit and pulled the Nifty FMCG down by 1.6%, making it the worst performer among sectoral indices, on a day the RBI governor said rural demand for FMCG products is steadily picking up. 

 

Shares of sugar and related companies also saw selling pressure today after the government directed all sugar mills not to use sugarcane juice or syrup to make ethanol in the 2023-24 season as sugar production is expected to be down this year. Shares of sugar stocks such as Dalmia Bharat Sugar and Industries, Balrampur Chini Mills, DCM Shriram Industries, and Dhampur Sugar Mills closed 3.9-4.6% lower.

 

Going forward, the market is likely to see some volatility in the near term considering the rise seen in both benchmark indices in the past few sessions. Investors will now seek cues from the outcome of the US Federal Open Market Committee, due on Wednesday, where key rates are widely expected to be kept unchanged. Market participants will also watch out for comments from the US Federal Reserve on rate cuts in the future.

 

* Of the Nifty 50 stocks, 22 rose, 27 fell, and 1 was unchanged 

* Of the Sensex stocks, 19 rose and 11 fell

* On the BSE, 1,679 stocks rose, 2,077 fell, and 124 were unchanged

* Nifty IT: Up 1.31%; Nifty Private Bank: Up 1.01%; Nifty FMCG: Down 1.60%

BSE                                                NSE
Sensex: 69825.60, up 303.91 pts, or 0.44%          Nifty 50: 20969.40, up 68.25 pts, or 0.33%

S&P BSE Sensitive Index                            Nifty 50
Lifetime High: 69893.80 (Dec 7, 2023)           :  Lifetime High: 21006.10 (Dec 7, 2023)
Record Close High: 69825.60 (Dec 7, 2023)       :  Record Close High: 20969.40 (Dec 7, 2023)

2023 1st day close: 61167.79 (Jan 2)            :  2023 1st day close: 18197.45 (Jan 2)
2023 Closing High: 69825.60 (Dec 7)             :  2023 Closing High: 20969.40 (Dec 7)

2023 Closing Low: 59288.35 (Feb 27)             :  2023 Closing Low: 17311.80 (Oct 17)

2023 High (intraday): 69893.80 (Dec 7)          :  2023 High (intraday): 21006.10 (Dec 7)

2023 Low (intraday): 58699.20 (Jan 30)          :  2023 Low (intraday): 17098.55 (Jan 17)

2022 1st day close: 59183.22 (Jan 3)            :  2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 63284.19 (Dec 1)             :  2022 Closing High: 18812.50 (Dec 1) 
2022 Closing Low: 51360.42 (Jun 17)             :  2022 Closing Low: 15293.50 (Jun 17)
2022 High (intraday): 63583.07 (Dec 1)          :  2022 High (intraday): 18887.60 (Dec 1)

2022 Low (intraday): 50921.22 (Jun 17)          :  2022 Low (intraday): 15183.40 (Jun 17)
2021 Closing High: 61305.95 (Oct 14)            :  2021 Closing High: 18338.55 (Oct 14) 
2021 Closing Low: 46285.77 (Jan 29)             :  2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14)         :  2021 High (intraday): 18350.75 (Oct 14)
2021 Low (intraday): 46160.46 (Jan 29)          :  2021 Low (intraday): 13596.75 (Jan 29)-

2020 Closing High: 47751.33 (Dec 31)            :  2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23)             :  2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31)         :  2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24)          :  2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20)         :  2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19)          :  2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28))         :  2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23)           :  2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26)         :  2017 High(intraday): 10515.10 (Dec 26)

End

 

With inputs from Neeshita Beura

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Source: Cogencis

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