December 9, 2023
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Nifty hits 21,000 as markets cheer RBI rate decision
The Nifty breached the 21,000-mark, rising up to 21,006.10, before swinging between gains and losses to settle at 20,969.40, a new closing high, up 0.33%.
The rally in India’s stock markets continued on Friday with the Nifty benchmark reaching the 21,000-mark in intraday trade.
While stocks pared some of their early morning gains, the sentiment was cheerful after the Reserve Bank of India (RBI) left key interest rates unchanged and sounded less hawkish than in previous monetary policy announcements. Importantly, the RBI’s higher growth forecast of 7% for FY24, above consensus expectations, was cheered by investors.
Investors, both local and foreign, have been buyers of equities, reassured by the BJP’s win in key state elections in the Hindi heartland, encouraging Q2FY24 GDP data and strong corporate profits. Expectations that the US Federal Reserve might not raise interest rates further, and the relatively stable prices of Brent crude at below $76 per barrel, have added to the bullish sentiment.
The Nifty breached the 21,000-mark, rising up to 21,006.10, before swinging between gains and losses to settle at 20,969.40, a new closing high, up 0.33%.
Similarly, the 30-share Sensex gained 0.44% to close at a new high of 69,825.60, after having risen 0.54% intra-day up to 69,893.80. However, the market value of BSE-listed firms saw an erosion of Rs 90,848 crore.
On a weekly basis, the Sensex gained 3.47% and the Nifty 3.46% — marking their best weekly gains since July 22, 2022 — the week during which they had gained 4.30% and 4.18%, respectively.
“The RBI took a balanced approach by raising the economic growth forecast, and expressing concern on food inflation that may have an elevated trajectory in the short term. A drop in rabi sowing and dipping reservoir levels give the perception that food grain prices may rise. The impact was visible on FMCG stocks, which underperformed today,” said Vinod Nair, head of research at Geojit Financial Services.
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