The Indian stock market showcased a mixed performance following the announcement of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decisions. Both benchmark indices, the BSE Sensex and NSE Nifty, remained within a limited range after recovering from an initial dip.

Key Market Trends

The stock market, which had been on a five-session upward streak, witnessed marginal corrections.

• BSE Sensex: Closed down 56.74 points (0.07%) at 81,709.12. The index hit an intraday high of 81,925.91 and a low of 81,506.19.
• NSE Nifty: Settled 30.60 points lower (0.12%) at 24,677.80.

Impact of RBI MPC Decisions

The RBI announced the following during its Monetary Policy Committee meeting:

1. Repo Rate: Held steady at 6.5% for the 11th consecutive time, reflecting the central bank’s cautious approach amid rising inflation.
2. Cash Reserve Ratio (CRR): Reduced by 50 basis points to 4%, effective in two phases (December 14 and 28). This move is expected to inject ₹1.16 lakh crore into the banking system.
3. GDP Estimates: Lowered due to a sharper-than-expected 5.4% contraction in India’s GDP during the July-September quarter.

RBI Governor Shaktikanta Das emphasized the need to balance inflation concerns with growth recovery measures.

Sectoral Impact and Stock Movement

• Losers: Shares of Adani Port, Bharti Airtel, Asian Paints, IndusInd Bank, Bajaj Finserv, Reliance Industries, Infosys, UltraTech Cement, HDFC Bank, HCL Technologies, and ICICI Bank ended in the red.
• Gainers: Tata Motors, Axis Bank, Maruti, Larsen & Toubro, ITC, and Tata Steel closed with gains.

Global Market Influences

Global markets presented a mixed picture:

• Asia: Declines in Seoul and Tokyo, gains in Shanghai and Hong Kong.
• Europe: Mixed trends during trading hours.
• US Markets: Declined on Thursday.

Brent crude oil, a global benchmark, fell 0.46% to $71.76 per barrel.

Currency Market Update

The rupee showed resilience, closing at 84.70 against the US dollar with a marginal gain of 1 paisa. The currency touched an intraday high of 84.53 and a low of 84.70.

On Thursday, foreign institutional investors (FIIs) continued their buying spree, purchasing equities worth ₹8,539.91 crore.

Market Outlook

The RBI’s decision to maintain the repo rate while adjusting the CRR reflects a balanced strategy aimed at addressing inflation and boosting liquidity. However, the revised GDP estimates signal caution for the upcoming quarters. As global markets remain volatile, domestic indices are likely to trade within a constrained range in the near term, with a focus on macroeconomic indicators and global trends.

Investors should remain vigilant and adopt a cautious approach in light of the evolving economic scenario.