Sensex jumps 782 pts; RBI raises FY25 GDP growth forecast to 7.2%

The domestic equity benchmarks marched higher and hit the day`s high in mid-morning trade after the Reserve Bank of India`s monetary policy committee raised India`s FY25 real GDP forecast to 7.2% from the earlier 7%. The Nifty scaled above the 23,050 mark after hitting the day�s low of 22,789.05 in early trade. Media shares advanced for the third day in a row.

At 11:30 IST, the barometer index, the S&P BSE Sensex was jumped 782.4 points or 1.05% to 75,861.25. The Nifty 50 index gained 233 points or 1.02% to 23,054.40.

In the broader market, the S&P BSE Mid-Cap index added 0.74% and the S&P BSE Small-Cap index advanced 1.72%.

The market breadth was strong. On the BSE, 2,751 shares rose and 874 shares fell. A total of 137 shares were unchanged.

RBI Monetary Policy Outcome:

The Reserve Bank of India (RBI) monetary policy committee (MPC) has voted to keep the repo rate unchanged at 6.5%.

RBI`s MPC at its meeting today, 7 June 2024, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The projected real GDP growth for 2024-25 has been revised upward to 7.2%. The quarterly breakdown is as follows: Q1 at 7.3%, Q2 at 7.2%, Q3 at 7.3%, and Q4 at 7.2%. This represents a slight improvement from the previous estimate, where the GDP growth was projected at 7%, with Q1 at 7.1%, Q2 at 6.9%, Q3 at 7%, and Q4 also at 7%. The risks associated with this projection are considered evenly balanced.

The projected CPI inflation for 2024-25 remains unchanged at 4.5%. The quarterly breakdown is as follows: Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%. This is consistent with the previous meeting`s projection, where CPI inflation for the same period was also estimated at 4.5%, with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6%, and Q4 at 4.5%.

The minutes of the MPC�s meeting will be published on 21 June 2024. The next meeting of the MPC is scheduled during August 6 to 8, 2024.

Buzzing Index:

The Nifty Media index jumped 1.78% to 1,976.90. The index surged 9.70% in three consecutive trading sessions.

Tips Industries (up 4.42%), Saregama India (up 3.49%), TV18 Broadcast (up 2.48%), Network 18 Media & Investments (up 1.5%), Zee Entertainment Enterprises (up 1.5%), Hathway Cable & Datacom (up 1.48%), Nazara Technologies (up 1.43%), Dish TV India (up 1.37%), Sun TV Network (up 0.73%) and PVR Inox (up 0.33%) advanced.

Stocks in Spotlight :

Rail Vikas Nigam (RVNL) advanced 1.53% after the civil construction firm received letter of award (LoA) from National Thermal Power Corporation (NTPC) for Rs 495.14 crore.

Mastek jumped 8.81% after the company�s cloud-native platform, icxPro platform partnered with NVIDIA AI Enterprise to boost CX (Customer Experience) management for different sectors.

Global Markets:

Asian stocks traded mixed on Friday as traders refrained from big bets until key economic data is released. Two important reports are on the docket:

The US nonfarm payrolls report, a crucial indicator of the health of the American economy, will be released later today. Investors are watching this data closely to gauge its impact on global markets.

Chinese trade data, also due later today, is being monitored by Asian markets. Concerns exist that excess capacity in China`s manufacturing sector could lead to tariffs being imposed on Chinese exports by its trade partners.

In the US, the S&P 500 and Nasdaq closed slightly lower on Thursday, giving back some of their gains from the previous session`s record highs. This came ahead of a key labor market report due Friday. Technology stocks, particularly Nvidia, led the decline.

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