Equity benchmark indices ended at record highs on Friday, inspite of some volatility post RBI policy annoucement.

The Reserve Bank of India’s Monetary Policy Committee decides to keep the repo rate unchanged at 6.5 per cent and also keeps the FY24 inflation forecast unchanged at 5.4 per cent. It, however, raised GDP forecast for FY24 to 7 per cent.

Post the annoucements, the NSE Nifty 50 zoomed past the 21,000-mark, to hit a high of 21,006. However, some profit-taking thereafter saw the benchmark index erase gains and slip into red to a low of 20,863. The Nifty eventually ended with a decent gain of 68 points at 20,969.

The S&P BSE Sensex high a new all-time high at 69,894 towards the fag end of the trading sessions and settled 304 points higher at 69,825.

Infosys, HDFC Bank and ICICI Bank were the major movers for the Sensex, while HCL Technologies, JSW Steel, Wirpo and Axis Bank also ended 1-3 per cent higher. On the other hand, ITC slipped nearly 2 per cent. Mahindra & Mahindra, Bajaj Finance and Tata Motors were the other prominent losers.

The broader indices, however, finished in red. The BSE MidCap was down 0.2 per cent, while the SmallCap slipped 0.4 per cent. The overall breadth too was marginally negative with almost 2,000 shares declining as against 1,750-odd advancing stocks on the BSE.

Bank Nifty on fresh lifetime high

The Bank Nifty took a 0.7 per cent leap to hit a fresh lifetime high of 47,170.25 levels on December 8 as investors cheered the Reserve Bank of India’s monetary policy outcome. The Bank Nifty index is up over 5 percent this week and is on its way to clock its biggest weekly gain since July 2022.

The index has surged over 9 per cent so far this year, as against a 15 per cent rally in the benchmark Nifty50 index.

Among individual stocks, ICICI Bank was up over 5 percent this week, whereas HDFC Bank, Axis Bank, Bank of Baroda, and State Bank of India were up 6 percent, 9 percent, 10 percent, and 5 percent, respectively, during the same period.

Earlier, Bank Nifty had hit claimed an all-time high of 46,484.45 levels on December 5 after Bharatiya Janata Party’s (BJP’s) sweeping victory in 3 out of 4 state election results. Later, on December 8, the upsurge in banking stocks was fuelled after the RBI kept repo rates steady at 6.5 percent for the fifth consecutive time.

The bulls defied weak Asian cues to trend higher. Weak oil prices and optimism in US stocks overnight helped sentiments back home.

“The market is likely to remain in a range in the near-term. A consolidation around the present levels is likely before the next phase of the rally begins. The undercurrents in the economy indicate a robust economy capable of sustaining the current trend of earnings growth into FY 25. Leading indicators like power demand, housing demand, credit growth and revival of rural demand suggest a resilient economy which can keep the market buoyant, restrained only by valuations. Fairly valued segments like banking may be accumulated on dips,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Falling crude is positive for paints, tyres and aviation where demand continues to be robust, he added.