Sensex rises 304 pts, Nifty ends near 21,000; IT, private banks climb

The stock market registered strong gains today as the Nifty briefly surpassed the 21,000-mark following the announcement by the Reserve Bank of India (RBI) to maintain the repo rate at 6.5% for the fifth consecutive time, aligning with market expectations. This decision, coupled with favorable global market, bolstered investor sentiment. RBI raised its GDP growth forecast for FY24 to 7% from 6.5%, which infused further optimism. Investors showed interest in IT, private banks, and financial services stocks, while FMCG and pharma shares witnessed correction.

The S&P BSE Sensex jumped 303.91 points or 0.44% to 69,825.60. The Nifty 50 index added 68.25 points or 0.33% to 20,969.40.

The Sensex clocked an all-time high of 69,893.80 while the Nifty hit record high of 21,006.10 in today�s session. Further, the Nifty Bank index also registered its fresh record high of 47,303.65.

Infosys (up 1.67%), HDFC Bank (up 1.38%) and ICICI Bank (up 1.16%) boosted the indices.

The broader market underperformed the headline indices. The S&P BSE Mid-Cap index fell 0.16% while the S&P BSE Small-Cap index slipped 0.44%.

The market breadth was negative. On the BSE, 1,679 shares rose, and 2,077 shares fell. A total of 124 shares were unchanged.

RBI MPC Meet Outcome:

The Reserve Bank of India�s (RBI) Monetary Policy Committee (MPC) today, 8 December 2023, announced its decision to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%. 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%.

All members of the MPC unanimously voted to keep the policy repo rate unchanged. 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 real GDP growth for 2023-24 is projected at 7% with Q3 at 6.5%; and Q4 at 6%. Real GDP growth for Q1:2024-25 is projected at 6.7%; Q2 at 6.5%; and Q3 at 6.4%. The risks are evenly balanced.

CPI inflation is projected at 5.4% for 2023-24, with Q3 at 5.6%; and Q4 at 5.2%. Assuming a normal monsoon next year, CPI inflation for Q1:2024-25 is projected at 5.2%; Q2 at 4%; and Q3 at 4.7%. The risks are evenly balanced.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose 0.39% to 7.264 as compared with previous close 7.236.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.3850, compared with its close of 83.3650 during the previous trading session.

MCX Gold futures for 5 February 2024 settlement added 0.02% to Rs 62,480.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.18% to 103.72.

The United States 10-year bond yield advanced 1.27% to 4.182.

In the commodities market, Brent crude for February 2024 settlement gained $1.21 or 1.63% to $75.26 a barrel.

Global Markets:

Shares in Europe and Asia advanced on Friday as Japan`s third-quarter GDP was revised downward in a surprise move.

Japan`s third-quarter GDP was revised downward to a 0.7% fall quarter-on-quarter, a sharper decline compared to the previously estimated 0.5% drop.

The yen emerged as the top-performing Asian currency this week, rising over 2% after BoJ Governor Kazuo Ueda hinted at a potential shift away from negative interest rates. This announcement led to a 0.2% rise in the yen to 143.88 against the dollar on Friday.

Ueda`s statements during a Thursday address caused a significant shift in expectations, indicating reduced anticipation of yen weakening and reinforcing beliefs that the BOJ will eliminate its negative rate policy in 2024. These developments contributed to the yen`s strengthening, despite data showing a larger-than-expected contraction in Japan`s economy during the third quarter.

US stocks ended higher on Thursday ahead of Friday�s all-important jobs report. The Nasdaq ended sharply higher after Alphabet and Advanced Micro Devices sparked a megacap rally on fresh optimism about artificial intelligence.

Stocks in Spotlight:

Indian Renewable Energy Development Agency (IREDA) rose 10.36% to Rs 70.85. The stock hit a record high of Rs 73.67 today.

The scrip entered the stock exchanges on 29 November 2023. It was listed at Rs 50, exhibiting a premium of 56.25% over the issue price of Rs 32. On that day, it settled at Rs 59.99, a premium of 87.47% over the issue price.

IRB Infrastructure Developers rallied 3.67% after the company�s toll collection jumped 19.43% to Rs 437.05 crore in November 2023 from Rs 365.96 crore in November 2022.

Titagarh Rail Systems advanced 1.98% after its board approved the opening of qualified institutional placement (QIP) of equity shares with the floor price of Rs 976.10 per share.

Olectra Greentech shed 0.17%. The company has received letter of award from Vasai Virar City Municipal Corporation, Mumbai for supply and maintenance of 40 electric buses. The Value of these 40 electric buses supply would be Rs 62.80 crore.

Sanghi Industries fell 1.03%. The company informed that its board has appointed Sukuru Ramarao as chief executive officer (CEO) and Sanjay Kumar Khajanchi as chief financial officer (CFO) of the company with effect from 7 December.

Bharat Forge rose 1.04%. The company said that its wholly owned subsidiary Kalyani Strategic Systems (KSSL) has signed a share subscription agreement for acquiring a majority stake in Zorya Mashproekt India (ZMI). KSSL will subscribe to 5,00,000 equity shares of face value Rs 10 each of ZMI at fair value. The cash acquisition will be completed by 31 December 2023.

Shriram Finance advanced 0.04%. The company said that it has executed a master agreement with Small Industries Development Bank of India (SIDBI) for co-lending of loans to MSME borrowers under the scheme of co-lending by way of back-to-back assignments of loans/ loan portfolios

Knowledge Marine & Engineering Works dropped 4.87%. The company announced that it has received an order from Visakhapatnam Port Authority aggregating to Rs 3.45 crore. The said order includes supply, manning, operation, and maintenance of 1 No Pilot Launch with a Steel hull on hire basis. The contract is for a period of three years and is set to commence from 24 March 2024.

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