Nifty50 claims mt 21,000 for first time, Sensex at new highs after RBI policy

Nifty50 scripted history on Friday as the NSE's barometer index scaled 21,000-mark for the first time early in the session, amid the RBI's monetary policy. After a day's hiatus, domestic equity markets were back in green on the back of positive global cues and RBI's in-line monetary policy.

On Friday, NSE's Nifty50 advanced 103.9 points, or 0.49 per cent, to scaled record highs at 21,005.05. However, the 30-share pack BSE Sensex hit new highs at 69,888.33, rising 366.64 points from its previous close. Broader markets also rose in tandem as BSE midcap and smallcap indices were also up about half a per cent each.

Markets have touched new highs, especially with earnings for the H1FY24 coming healthy supporting the trajectory. Investors are bullish as they are favouring rate cuts in 2024 which will unanimously boost the equity markets, said Anil Rego, Founder and Fund Manager at Right Horizons.

RBI, in its monetary policy today, unanimously kept the interest rates unchanged. All six members voted in the favour of the motion. The central bank also announced the withdrawal of the 'accommodative' stance from its policy in a 5:1 ratio. The policy was mostly in line with the market expectations.

Anirudh Garg, Founder, and Fund Manager at Invasset PMS  said that the stock market is likely to react positively to the RBI's recent announcements. The decision to maintain the policy repo rate and the continued focus on inflation targeting provides a stable environment for investors. 

"This stability, combined with India's strong economic fundamentals and GDP growth, is likely to boost investor confidence. The banking sector may benefit from the steady interest rate environment, as it aids in better margin management," he said. "The stock market is likely to experience a steady momentum, buoyed by a stable policy environment and strong economic indicators."

Shaktikanta Das led RBI raised its projection for FY24 to 7 per cent from 6.5 per cent earlier. The Reserve Bank also revised the projection for real GDP growth in the current quarter to 6.5 per cent from 6 per cent earlier, and that for the March quarter has been raised by 30 basis points to 6 per cent.

At a sectoral level, only the Nifty auto, pharma and FMCG indices were seen in red in the early trade. The Nifty media index rose about 2 per cent, while the Nifty media and realty indices advanced a per cent each. Financial and banking stocks also provided the needed support to the markets.

In line with market expectations, the MPC's decision to maintain interest rates as well as its policy stance is unchanged. Inflation projections were maintained, although the near-term concerns over food inflation have not gone away, said  Mukesh Kochar, National Head of Wealth at AUM Capital.

"There is also a cooling off of inflation around the world. We are convinced the rates are picking up and should continue to be heard for some time. The US Federal Reserve is expected to cut its interest rate around the middle of next year" he said. The yield on GSec should decrease by about 50-75 basis points as a result of both factors. We remain positive on long-term debt funds from 1-2 year perspective."

In the Nifty50 pack, JSW Steel shares surged about 4 per cent, followed by HCL Technology and NPTC which advanced 2 per cent each. LTIMindTree, UPL, Hindalco, Larsen & Toubro and HDFC Bank were up a per cent each. On the contrary, Bharat Petroleum, Bajaj Finance and M&M were the major laggards.

In the broader markets, sugar stocks continued to bleed after the government's proposal to ban sugar or sugar-syrup based ethanol. Praj Industries tanked 8 per cent, while Shree Renuka Sugars, Bajaj Hindusthan Sugar and Ugar Sugar dropped up 5 per cent in the early trade.

GMR Airports Infrastructure and KIOCL hit an upper circuit of 10 per cent each, while Indiabulls Real Estate was up 8 per cent for the day. MMTC and Nocil advanced 7 per cent each, while RBL Bank rose 6 per cent.

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