Market Commentary - Mid-Session
Benchmarks trade with minor cuts; IT shares slide As on : 06-Dec-24  14:36

The key equity indices traded with limited losses in mid-afternoon trade. The Nifty traded below the 24,700 level after hitting the day's high of 24,751.05 in mid-morning trade. IT shares declined after advancing in past five consecutive trading sessions.

At 14:30 IST, the barometer index, the S&P BSE Sensex was down 61.31 points or 0.08% to 81,702.05. The Nifty 50 index lost 26.10 points or 0.11% to 24,682.30.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.39% and the S&P BSE Small-Cap index rallied 0.64%.

The market breadth was strong. On the BSE, 2,410 shares rose and 1,554 shares fell. A total of 100 shares were unchanged.

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.

Buzzing Index:

The Nifty IT index fell 0.33% to 44,660.25. The index rallied 4.16% in past five consecutive trading sessions.

Wipro (down 0.67%), Tech Mahindra (down 0.39%), Tata Consultancy Services (down 0.36%), L&T Technology Services (down 0.21%) and HCL Technologies (down 0.17%) declined.

On the other hand, Coforge (up 0.53%), Persistent Systems (up 0.50%) and LTIMindtree (up 0.43%) edged higher.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.82% to 6.845 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 84.6800, compared with its close of 84.7100 during the previous trading session.

MCX Gold futures for the 5 December 2024 settlement added 0.40% to Rs 76,780.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.09% to 105.81.

The United States 10-year bond yield rose 0.18% to 4.190.

In the commodities market, Brent crude for the November 2024 settlement lost 29 cents or 0.40% to $71.80 a barrel.

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