Equity benchmark indices ended positive for the fourth day, investor sentiments boosted by Reserve Bank of India’s double bonanza of a larger-than-expected repo rate cut and reduction in the CRR. While the main indices were range-bound during the day’s session, broader market indices reflected overall optimism among market participants.
The Nifty50 ended at a eight-month high, led by bank stocks, with the Nifty Bank index hitting a new record high.
The Nifty 50 ended 0.40 per cent high at 25,103.20, its highest close since October 14, 2024. The BSE Sensex settled 0.3 per cent up at 82,445.21, after rising by 480 points intraday, led by banking and financial stocks.
The Nifty Bank breached the 57,000-mark for the first time with stocks of both private banks and state-owned banks surging during the session. “The dual gains in public sector and private banking stocks indicate investor expectations of improved credit growth, enhanced liquidity, and stronger earnings going forward,” according to an analyst at Bajaj Broking.
According to Vinod Nair, Head of Research, Geojit Investments, financial stocks extended their rally, driven by the RBI’s supportive monetory policies - repo rate and CRR cut.
“These actions have boosted investor confidence and are expected to enhance liquidity in the near to medium term, especially in midcaps. The positive US jobs data and renewed optimism over US-China trade talks lifted global sentiment. Domestically, even large caps expressed renewed momentum, led by FII inflows,” Nair added. On Friday the RBI cut the key lending rate by 50 bps and reduced the CRR by 100 bps.
Midcap and smallcap indices extended their outperformance relative to the benchmark. The Nifty Midcap 100 advanced by 1.13 per cent, while the Nifty Smallcap 100 surged even stronger by 1.57 per cent.
On the sectoral front, all indexes, except Nifty Realty, ended in the green. Among them, financials, NBFCs, PSU banks, IT, and oil & gas witnessed strong buying interest.
Top movers
Among the Nifty 50 pack, Jio Financial Services, Kotak Mahindra Bank, Bajaj Finance, Trent, Axis Bank and Adani Enterprises emerged as major gainers, while Eternal and ICICI Bank were major laggards.
Shares of Titan, M&M, Adani Ports and Bharti Airtel slipped to end in negative territory.
NBFC stocks including Cholamandalam Investment, IIFL Finance, Manappuram Finance and Muthoot Finance rallied on RBI’s policy support.
Bandhan Bank, IREDA, Hindustan Zinc, OFSS and Muthoot Finance surged 4-7 per cent among midcap. Five-Star Business, IIFL, Manappuram Finance, MCX and MGL zoomed 7-9 per cent among smallcap.
The market is likely to continue its gradual up-move, according to Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services, on the back of strong domestic cues such as better-than-expected Q4 corporate earnings, RBI’s liquidity-boosting measures, an above average monsoon forecast and the likely US-India trade deal.
Asian markets settled in positive territory during the day ahead of the US-China trade talks in London.