Sensex Rises 304 Pts On Friday As RBI Maintains Key Repo Rate

Indian equity indices closed at fresh record highs on Friday after the Reserve Bank of India (RBI) stood pat on key rates for a fifth consecutive time and raised its growth forecast for fiscal 2023-2024. Benchmark indexes also posted their longest weekly winning streak in three years on the back of strong macroeconomic data and a drop in oil prices.

The BSE benchmark Sensex rose 304 points or 0.44 per cent to settle at 69,825, while NSE Nifty gained 60 points or 0.28 per cent to end at 21,090. In early trade, the Nifty rose above 21,100 for the first time after the RBI maintained its key repo rate at 6.50 per cent, amid robust economic growth and expectations of a rise in food prices in the coming months. The central bank raised its growth forecast for the ongoing fiscal to 7 per cent from 6.5 per cent earlier and maintained the inflation expectation at 5.4 per cent. Rate-sensitive sectors like banks, financial services, public sector banks and private banks rose between 0.2 per cent and 1 per cent while realty gained 0.5 per cent.

The market capitalisation of all listed companies on BSE declined by Rs 83,900 crore to Rs 349.30 lakh crore. The market breadth was skewed in the favour of the bears. About 2,077 stocks declined, 1,679 gained and 124 remained unchanged on the BSE.

FII and FPIs, on Friday, saw a net purchase of Rs 3,632.30 crore in the cash segment. A total of Rs 15,969.98 crore was sold against a total purchase of Rs 19,329.28 crore. Domestic institutional investors saw net sales of Rs 434.02 crore in the cash segment. A total of Rs 9,967.50 crore was sold against a total purchase of Rs 9,533.13 crore.

Meanwhile, The RBI took a balanced approach by raising the economic growth forecast and also expressing concern about food inflation, which may have an elevated trajectory in the short term. A drop in rabi sowing and dipping reservoir levels provides a perception that foodgrain prices can rise. The impact was visible on FMCG stocks, which underperformed today.

Technically, the important key resistances placed in October Nifty future are at 21,090 levels, which could offer the market on the higher side. Sustainability above this zone would signal opens the door for a directional upmove with immediate resistances seen at 21,133 – 21,272 levels. Immediate support is placed at 20,939 – 20,808 levels.