Stock market today: Nifty 50, Sensex snap 5-day winning run despite RBI’s balancing act | Stock Market News

Stock Market Today: Indian equity markets ended flat with a negative bias on Friday, December 6, with the Nifty 50 and Sensex showing little movement after a series of key announcements by the Reserve Bank of India (RBI) in its MPC meeting today. 

The RBI MPC pulled off a balancing act today as it kept the repo rate unchanged at 6.5% for the eleventh consecutive policy meeting but reduced the Cash Reserve Ratio (CRR) by 50 basis points. However, the CRR cut had little impact on market sentiment, as it was largely anticipated by investors.

While the move was seen as a positive measure to support liquidity in the banking system, the markets remained subdued due to concerns over India’s economic outlook and inflation. The RBI downgraded its FY25 real GDP growth forecast from 7.2% to 6.6% and raised the inflation target from 4.5% to 4.8%, dampening investor sentiment.

The dual challenges of rising inflation and slowing growth are now coming to the forefront, raising questions about the sustainability of economic recovery.

The persistent inflation is affecting economic growth and eroding the purchasing power of consumers, particularly those in urban India. The central bank expects inflation to remain elevated in the ongoing quarter, with a potential deceleration only in the fourth quarter of the current fiscal year.

Additionally, the RBI highlighted the potential impact of protectionism, which it believes could contribute to a rise in prices and elevate global inflation.

Front-line indices end lower but close strong for the week

The Nifty 50 ended the session with a minor loss of 0.12% at 24,677, snapping its five-day winning streak. However, it posted a sharp weekly gain of 2.27%.

The BSE Sensex also ended its five-day bull run, closing the session with a slight drop of 0.07% at 81,709, but wrapped up the week with a notable uptick of 2.39%. Notably, this marks the third consecutive week of gains for both indices.

The Nifty Smallcap 100 index extended its winning streak for the 11th consecutive session, adding 0.82% to reach 19,492, and concluded the week with a robust gain of 4.51%.

Commenting on today’s market performance, Vinod Nair, Head of Research, Geojit Financial Services said, “Though benchmark indices concluded on a flattish trend, Indian broader indices displayed optimism as the RBI acknowledged the downward growth trend while last-mile inflation persisted.”

“By lowering the CRR and injecting ₹1.16 lakh crore into the financial system, the RBI aims to stimulate economic growth amid increased liquidity. The overall market exhibited a mixed outlook, reflecting a cautious yet resilient stance, with sector rotation and specific stock movements shaping market sentiment,” he added. 

Sectoral Performance: Nifty Metal shines; media stocks lag

Among the sectoral indices, Nifty Metal led the gains with a rise of 1.23%, followed by Nifty Consumer Durables, Nifty Auto, and Nifty PSU Bank, all of which closed higher with gains ranging from 0.42% to 1.09%.

On the downside, Nifty Media was the top laggard, falling by 0.33%, while Nifty IT snapped its five-day winning streak, ending the session with a modest loss of 0.2%. In the previous trading session, the Nifty IT index had touched the 45,000 mark for the first time.

Additionally, Nifty Pharma closed the session with a slight decline of 0.13%.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said, “Markets have been rising for the past five trading sessions and hence a small breather was expected. With RBI springing no major surprise in its credit policy announcement, investors booked profit in select frontlines. Although the undertone remains that of caution, the return of FIIs into local equities through select bullish bets has come as a major reprieve to investors.”

Nifty 50: Key levels and trends

Rupak De, Senior Technical Analyst, LKP Securities said, “The Nifty continues to sustain above the breakout from an inverse head-and-shoulders pattern, indicating underlying market strength. In such conditions, adopting a buy-on-dips strategy seems prudent, especially with the potential for an upward move toward 25,500 in the short term.”

However, he said minor pullbacks following a sharp rally are possible, emphasizing the effectiveness of buying on dips to capitalize on this trend.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.