Volatility marks the Indian stock market as the Sensex trades at 81,796.22 and Nifty50 at 24,717.95
The Indian stock market displayed a volatile trend on Friday as investors digested the Reserve Bank of India (RBI) Governor’s announcement to maintain the status quo on key repo rates. Despite the uncertainty, the benchmark indices managed to hold onto marginal gains during early trade. At 10:40 AM, the BSE Sensex was at 81,796.22, up by 30.36 points or 0.04%, while the NSE Nifty50 was trading at 24,717.95, a modest rise of 9.55 points or 0.04%.
Macroeconomic Insights and RBI’s Stand
The RBI’s Monetary Policy Committee (MPC) decision to maintain repo rates comes amid concerns over a slowing economy. India’s GDP growth for the July-September quarter declined to 5.4%, which marks a deceleration from previous quarters. Despite this, most analysts in a Business Standard survey predicted the RBI would refrain from any rate adjustments, maintaining the current stance to provide stability in uncertain economic conditions.
Foreign Portfolio Investments on the Rise
Foreign portfolio investors (FPIs) have re-entered the Indian markets in December, signaling renewed confidence after two months of consecutive outflows. FPIs invested ₹24,500 crore in Indian equities during the first four trading sessions of December, including a substantial ₹8,540 crore on Thursday alone. This influx of foreign capital has provided much-needed support to Indian markets, with broader participation observed in both midcap and smallcap segments.
Performance of Key Indices
The BSE Sensex and Nifty50 extended their winning streak into a fifth consecutive session on Thursday. The Sensex closed at 81,765.86, up by 809.53 points or 1%, while the Nifty50 ended at 24,708.40, gaining 240.95 points or 0.98%. Both indices touched intraday highs, with the Nifty scaling 24,857.75 and the Sensex reaching 82,317.74. Broader market indices also posted gains, with the Nifty Midcap100 and Nifty Smallcap100 rising by 0.57% and 0.83%, respectively.
Sectoral Performance
The Nifty IT index was the standout performer, rising by 1.95% and achieving a new 52-week high of 45,027.95 during intraday trading. IT giants such as TCS, Infosys, and LTIMindtree drove the rally, buoyed by positive earnings outlooks and sustained demand for digital transformation services. Other sectoral indices also ended in the green, except for the Nifty PSU Bank and Realty indices, which saw marginal declines.
Global Market Overview
Globally, markets presented a mixed picture. On Wall Street, major indices such as the Dow Jones, S&P 500, and Nasdaq Composite dipped after hitting record highs earlier this week. The Dow Jones fell by 0.55%, closing at 44,765, while the S&P 500 and Nasdaq saw marginal declines of 0.19% and 0.18%, respectively. Investor sentiment was tempered by Federal Reserve Chair Jerome Powell’s comments on adopting a cautious approach to further rate cuts and weaker-than-expected data from the US ISM services survey.
In Europe, equity markets closed at a one-month high on Thursday, buoyed by easing concerns over inflation and positive corporate earnings. Meanwhile, the Asia-Pacific region experienced mixed trends on Friday. Japan’s Nikkei 225 fell by 0.83%, and South Korea’s Kospi dropped by 0.86%, while Hong Kong’s Hang Seng Index and China’s CSI 300 posted gains of 0.21% and 0.13%, respectively.
Nomura’s Outlook on Indian Equities
Global brokerage firm Nomura remains cautiously optimistic about Asia’s equities for 2025, with India being one of its top overweight positions in the Asia ex-Japan basket. Despite near-term risks of valuation corrections, India’s growth story and robust market fundamentals continue to attract investors. Nomura is neutral on markets such as China, Indonesia, and Singapore, while remaining underweight on Thailand, the Philippines, and South Korea.
Cryptocurrency Market Impact
The recent rally in Bitcoin, which surged past the $100,000 mark on Thursday, has also captured the attention of Indian investors. The increasing interest in cryptocurrencies may play a role in diversifying investment flows, adding another layer of dynamism to the financial landscape.
The Indian stock market remains resilient despite global uncertainties and domestic macroeconomic challenges. The RBI’s decision to hold rates steady, coupled with strong FPI inflows, has provided a stable foundation for further market growth. As sectoral performances and global cues continue to influence sentiment, the focus remains on the upcoming developments in both domestic and international markets.
