Market Commentary - End-Session
Benchmarks snap five-day rally, end with small losses As on : 06-Dec-24  17:04

The domestic equity benchmarks concluded a volatile trading session on Thursday, ending a five-day winning streak. The Nifty 50 index closed below the 24,700 level, despite hitting an intraday high of 24,751.05. Sectorally, metal and auto stocks emerged as top performers, while banking and IT stocks witnessed a decline.

The market's movement was largely influenced by the Reserve Bank of India's (RBI) monetary policy decision. While the central bank maintained the repo rate, it reduced the cash reserve ratio (CRR) to ease liquidity conditions. The RBI expressed optimism about improving demand trends and industrial growth, driven by increased government spending and stronger rural demand. However, persistent inflationary pressures have pushed back the timeline for the next rate cut to February 2025.

The barometer index, the S&P BSE Sensex was down 56.74 points or 0.07% to 81,709.12. The Nifty 50 index lost 30.60 points or 0.12% to 24,677.80.

Reliance Industries (down 0.71%), HDFC Bank (down 0.39%) and ICICI Bank (down 0.32%) were major drags.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.36% and the S&P BSE Small-Cap index rallied 0.60%.

The market breadth was strong. On the BSE, 2,399 shares rose and 1,590 shares fell. A total of 99 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, slipped 2.66% to 14.14.

RBI Monetary Policy Meeting Outcome:

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

After assessing the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (December 6, 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%.

To ease the potential liquidity stress, RBI has decided to reduce the cash reserve ratio (CRR) of all banks to 4.0% of net demand and time liabilities (NDTL) in two equal tranches of 25 bps each, with effect from the fortnight beginning December 14, 2024 and December 28, 2024. This reduction in the CRR would release primary liquidity of about Rs 1.16 lakh crore to the banking system.

The projected real GDP growth for 2024'25 is slashed to 6.6% from 7.2% earlier. The RBI has revised India's Consumer Price Inflation (CPI) forecast for financial year 2025 to 4.8% from 4.5% earlier.

Numbers to Track:

The yield on India's 10-year benchmark federal grew 2.65% to 6.857 as compared with the previous close of 6.789.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 84.6925 compared with its close of 84.7100 during the previous trading session.

MCX Gold futures for the 5 December 2024 settlement rose 0.23% to Rs 76,650.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.14% to 105.86.

The United States 10-year bond yield added 0.34% to 4.194.

In the commodities market, Brent crude for February 2025 settlement declined 42 cents or 0.58% to $71.67 a barrel.

Global Markets:

Most European stocks advanced on Thursday as investors in the region digested the latest political developments in France.

Most Asian stocks ended mixed after Wall Street stock benchmarks notched record highs, shrugging off global political turmoil.

In Asia, key economic data releases include India's interest rate decision and Malaysia's foreign reserves. China's November foreign reserves data may also be released today.

US stock markets pulled back from record highs on Thursday as investors took a cautious approach ahead of the payrolls report. The S&P 500 declined 0.2%, the NASDAQ Composite fell 0.2%, and the Dow Jones Industrial Average dropped 0.6%. Technology stocks, a major driver of recent market gains, retreated, while economically sensitive sectors like energy, financials, and industrials also lost ground.

US initial jobless claims rose to 224,000 for the week ended November 30th, up from the previous week's revised figure of 215,000.

The upcoming US nonfarm payrolls report will be closely watched by investors and policymakers alike. A strong reading could reinforce expectations of economic recovery and support further normalization of monetary policy.

Meanwhile, Bitcoin tumbled from record highs above the coveted $100,000 level, as it was slapped with heavy profit-taking.

New Listing:

Shares of Suraksha Diagnostic settled at Rs 417.95 on the BSE, a discount of 5.23% compared with the issue price of Rs 441.

The scrip was listed at Rs 437, exhibiting a discount of 0.90% to the issue price. The stock has hit a high of 449 and a low of 414.80. On the BSE, over 5.69 lakh shares of the company were traded in the counter.

Stocks in Spotlight:

Garden Reach Shipbuilders & Engineers added 1.18%. The firm signed contract for construction and delivery of second ship from series of four additional 7500 DWT Multi-Purpose Vessels (MPV) on 4 December 2024 at Hamburg, Germany.

Mishtann Foods slumped 20% after the Sebi imposed a trading ban on the company and its promoter, Hiteshkumar Gaurishankar Patel.

The Securities and Exchange Board of India (Sebi)'s investigation revealed that Mishtann Foods engaged in a series of dubious practices, including circular trading with fictitious entities controlled by the company's directors and their associates. These fraudulent transactions inflated the company's financial performance, misleading investors and regulators.

The company's board has decided to pursue legal remedies against the show cause notice. Mishtann Foods has appealed to the public to exercise restraint and respect the due process of law.

Canara Bank rose 0.88% after the Reserve Bank of India (RBI) accorded approval to the bank for divesting its shareholding in two entities by 13% and 14.5% respectively through initial public offer (IPO).

Angel One added 2.23% after compay said that its client base jumped 56% to 28.78 million in November 2024 as compared with 18.45 million in November 2023.

Advait Infratech hit an upper circuit of 5% after the company received an order for supply and installation of 24 F OPGW (optical ground wire) from NRSS XXXI (B) Transmission on 5 December 2024.

Zaggle Prepaid Ocean Services (Zaggle) hit an upper circuit of 5% after the company announced that it has entered into an agreement with Hitachi India and Blink Commerce.

Kernex Microsystems (India) hit an upper circuit of 5% after the company announced that it has received an order worth Rs 2,041.40 crore from Chittaranjan Locomotive Works.

FSN E-Commerce Ventures (Nykaa) shed 0.66%. The company's chief executive officer (CEO) and senior management personnel, Nihir Parikh, tendered his resignation due to personal commitments.

ITCONS E-Solutions slipped 0.97%. The company entered into a master service agreement (MSA) with Wal-Mart India to provide one-time placement services across India.

Ramco Systems advanced 1.88% after the company has entered into a partnership with Hanjin Information Systems & Telecommunication (HIST) to digitally transform their M&E and MRO operations.

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