The stock market opened with a marginal uptick on Wednesday, with the Sensex opening higher at 81,182.74 from its previous close of 80,956.33 and is currently trading at 81,034.95 as of 9.45 AM, up by 78.62 points or 0.10 per cent. Similarly, the Nifty opened at 24,539.15 compared to its previous close of 24,467.45 and is now at 24,476.75, gaining 9.30 points or 0.04 per cent, continuing its four-session winning streak amid anticipation of the Reserve Bank of India’s (RBI) upcoming policy decision and positive global market sentiment.

Foreign institutional investors (FIIs) continued their buying spree, purchasing equities worth ₹1,798 crore, which has been providing support to the market. “FIIs turning buyers is positive for markets, particularly for large-caps,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Top gainers on the National Stock Exchange include Infosys (1.13 per cent), TCS (0.99 per cent), Titan (0.89 per cent), Ultratech Cement (0.80 per cent), and Tech Mahindra (0.77 per cent). Conversely, top losers were NTPC (-1.30 per cent), JSW Steel (-0.77 per cent), Bajaj Auto (-0.77 per cent), Grasim (-0.59 per cent), and SBI Life (-0.58 per cent).

The global market backdrop provided additional context for the day’s trading. The Dow Jones crossed the 45,000-mark for the first time, with the US Federal Reserve Chair Jerome Powell noting that the “economy is in remarkably good shape.” Deepak Jasani from HDFC Securities highlighted that US stocks finished at fresh milestones, with investors unfazed by the Fed’s cautious approach to rate cuts.

Sector-specific movements showed promise in several areas. PSU banking stocks demonstrated notable gains, with expectations of a potential cash reserve ratio (CRR) cut in the upcoming RBI policy. The real estate sector also showed positive momentum, with projections of record housing sales in India’s top seven cities, valued at ₹5.1 trillion.

The defence sector is anticipated to maintain its upward trend following government approval of over ₹21,772 crore in funding for the armed forces. Insurance stocks are likely to attract attention due to potential reductions in GST rates on health and life insurance policies.

“The Nifty sustained above 24,250 level, indicating a bullish trend,” noted Vikas Jain from Reliance Securities. Technical analysts like Sameet Chavan from Angel One suggest that a breakthrough above 24,550-24,600 could provide significant momentum, with potential targets of 24,800 and eventually 25,000.

An interesting highlight comes from the performance of the Nifty Next 50 index. Amit Golia, Group CEO of Markets Mojo, pointed out that this index has significantly outperformed the Nifty 50, delivering yearly returns of 47.41 per cent compared to the Nifty 50’s 21.06 per cent as of December 2, 2024.

Commodity markets also drew attention. Gold remained steady at $2,647 per ounce, supported by dovish comments from the Federal Reserve and weaker-than-expected US economic data. Crude oil prices showed volatility, with traders awaiting the OPEC+ meeting scheduled for Thursday.

Investors are advised to keep a close watch on the upcoming RBI policy decision, which could provide further direction to the market. “Nifty could rise further if FIIs continue their buying spree, with bullish sentiment driven by hopes for a dovish RBI policy,” said Prashanth Tapse from Mehta Equities Ltd.

Published on December 5, 2024