Nifty Stocks Attain New-highs After RBI’s Monetary Policy; Nifty, Sensex On Record Levels
As the Friday trading session marks the Nifty and Sensex to claim new highs, a significant number of benchmark index, Nifty 50 stocks, hit their new highs after the dovish stance from the Reserve Bank of India (RBI).
Around 19 stocks cheered the steady rates to rally in positive momentum and attained their new all-time high mirroring the bullish pace.
The stocks included Grasim Industries, Titan, NTPC, Adani Ports and SEZ, ICICI Bank, Sun Pharmaceuticals Industries, Tata Consumer Products, Ultratech Cement, Bharti Airtel, Axis Bank, Bajaj Auto, Eicher Tata Motors, SBI Life Insurance, PowerGrid, Maruti Suzuki India, Nestle India, Tata Motors, L&T, Grasim Industries, and Tata Motors.
The Sensex also set a new record at 69,888.33, and the Nifty 50 achieved a new record level of 21,005.05. This increase came after the RBI decided to maintain the repo rate at 6.5 per cent, in line with what the market had anticipated.
The monetary policy committee of the RBI decided unanimously by a vote of five versus one to keep removing accommodations to promote growth and bring inflation into line with the objective.
The RBI maintained the exact status quo about policy rates and liquidity stance, as anticipated. The RBI has increased its GDP forecast for FY24 by 50 basis points, to 7 per cent, while leaving the inflation forecast unchanged. The policy was, on the whole, less hawkish than had been anticipated. Simultaneously, the governor issues specific warnings regarding premature adjustments to monetary policy rates and liquidity stance, which indicate that the rate pause and liquidity withdrawal stance may persist for a longer duration than initially expected,” said Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares and Stock Brokers.
With six straight weeks of gains, the Nifty is enjoying its best winning streak since December 2020. The three per cent increase this week is the biggest weekly result since July 2022.
"RBI positioned its prudent stance keeping the repo rate unchanged, this certainly is music to investor’s ear by subtlety communicating peaking of the interest rate cycle, with no increase in interest rate in sight. Further, balance sheet moderation as a percentage of GDP is applauded and shows strength in independent thought leadership of the RBI," said Umeshkumar Mehta, CIO, SAMCO Mutual Fund.
Positive GDP numbers, net FIIs inflows, BSE’s USD 4 trillion market cap and the BJP's success in crucial state elections in the Hindi heartland are also among the reasons behind the market's recent highs. The good mood in the market is also attributed to global cues like a drop in oil prices, low US treasury yield and rate pause anticipation from the US Fed on 13 December.
“The MPC remains focused on bringing headline CPI inflation towards 4 per cent year-on-year (YoY), and particularly vigilant about the risk of a renewed spurt in vegetable inflation in November-December 23. We are more optimistic about growth, we were forecasting 7.2 per cent growth for FY24 from the start of the fiscal year. So we welcome the upward revision of the RBI’s forecast for FY24 to 7 per cent,” said Prasenjit Basu, Chief Economist, ICICI Securities.
The benchmark index Nifty50 clocked its highest gains of 5.52 per cent in November after July 2022 returns of 8.7 per cent, Nifty has gained 3.75 per cent so far in December trading sessions. The Nifty year-to-date (YTD) returns stood at 17 per cent year-to-date (YTD), whereas in this financial year, Nifty has delivered almost 20 per cent returns.
