Closing Bell: Market Snaps 5-Day Gaining Streak On RBI Policy Day; Sensex & Nifty End With Mild Cuts

Indian equity markets snapped their five-day winning streak on December 6, ending the session flat amid volatility following key policy announcements by the Reserve Bank of India (RBI). The Sensex fell 56.74 points or 0.07% to close at 81,709.12, while the Nifty dropped 30.60 points or 0.12% to 24,677.80.

RBI Policy Decisions Weigh

The RBI maintained the repo rate at 6.5% for the 11th consecutive policy meeting, aligning with expectations. However, its decision to cut the Cash Reserve Ratio (CRR) by 50 basis points, aimed at enhancing liquidity in the banking system, failed to uplift market sentiment.

Adding to investor concerns, the central bank downgraded its FY25 real GDP growth forecast from 7.2% to 6.6% and raised its inflation target from 4.5% to 4.8%. The RBI highlighted that inflation remains elevated in the current quarter, with relief expected only in the fourth quarter of FY25, driven by seasonal corrections in vegetable prices. Furthermore, the central bank warned about the risks posed by global protectionist policies, which could fuel inflationary pressures worldwide.

While the benchmark indices struggled, sectoral performance was a mixed bag. Auto, metal, PSU banks and telecom indices ended in the green, posting gains of 0.3%-1%. On the other hand, FMCG, IT, and media indices slipped into the red.

The Nifty Bank index was particularly under pressure, falling 94 points or 0.18% to close at 53,510, nearly 400 points off its intraday high. In contrast, mid and smallcap stocks continued their stellar performance, with the BSE Midcap index gaining 0.4% and the Smallcap index rising 0.6%.

Bajaj Auto and Tata Motors surged 2%-3%, while Maruti Suzuki rose 2% after announcing a price hike effective January. Samvardhana Motherson climbed 2% following its acquisition of Japan-based Atsumitec for $57 million.

MCX hit a record high, jumping 8% on strong buying interest. RITES jumped 3% on a contract worth Rs 148.25 crore. Kernex Microsystems shares hit a record high, gaining 5%, after the company secured a Rs 2,000 crore order.

Cipla, HDFC Life, and Asian Paints were among the top laggards on the Nifty, reflecting broader concerns over valuation. Ola Electric slipped 2% after the Central Consumer Protection Authority sought additional information regarding a previous submission.

Weekly Market Wrap

The broader markets posted robust gains for the third consecutive week, with the Sensex and Nifty rising over 2% each, marking their best weekly performance in six months. All sectoral indices, except FMCG, ended the week in the green, with PSU banks leading the gains. Mid and small cap indices outperformed, reflecting strong investor interest in broader market opportunities.

Rupee Update

In currency markets, the Indian Rupee strengthened marginally, closing at 84.69 per US Dollar compared to the previous close of 84.73.