Market Commentary - Mid-Session
Indices hover near flat line; European mkt opens higher As on : 06-Dec-24  13:38

The key equity benchmarks continued to trade near the flat line with some negative bias in the afternoon trade. The Nifty hovered near the 24,700 level. Metal, consumer durables and auto shares were in demand while IT, realty and media stocks corrected. The RBI decided to keep the benchmark repo rate unchanged at 6.5%. However, slashed the cash reserve ratio (CRR) by 50 bps to 4%.

At 13:30 IST, the barometer index, the S&P BSE Sensex, declined 44.28 points or 0.05% to 81,721.58. The Nifty 50 index lost 7.95 points or 0.03% to 24,700.45.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rallied 0.36% and the S&P BSE Small-Cap index rose 0.65%.

The market breadth was strong. On the BSE, 2,411 shares rose and 1,496 shares fell. A total of 118 shares were unchanged.

Gainers& Losers:

Bajaj Auto (up 1.90%), BPCL (up 1.59%), Axis Bank (up 1.58%), Titan Company (up 1.48%) and ITC (up 1.47%) were major Nifty gainers.

Cipla (down 2.07%), Bharti Airtel (down 1.47%), Adani Ports (down 1.18%), HDFC Life Insurance Company (down 0.79%) and Infosys (0.72%) were major Nifty losers.

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.

Stocks in Spotlight:

FSN E-Commerce Ventures (Nykaa) slipped 2.15% after Nikhil Parikh resigned from his position as chief executive officer (CEO) of Nykaa Fashion.com.

Garden Reach Shipbuilder & Engineer (GRSE) added 2.16% after the company signed a contract for the construction and delivery of the second ship from a series of four additional 7,500 DWT multi-purpose vessels in Germany. In September, the company had secured an order for the construction and delivery of four additional multi-purpose vessels of 7,500 DWT each.

Kernex Microsystems (India) was locked in 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.

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

Global Market:

Shares in Europe advanced while Asian shares traded mixed on Friday. All eyes are on the U.S. nonfarm payroll report due in the day that may help shape the direction of the Federal Reserve's policy path later this month.

In Asia, key economic data releases include Malaysia's foreign reserves, and China's November foreign reserves data.

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.

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