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Sensex, Nifty Surge

• Sensex and Nifty ended high, with a significant surge in the realty sector.
• Despite a Q2 growth slump, the market maintained a positive bias due to signs of core sector recovery.
• The RBI's decision to keep the repo rate unchanged at 6.5% has influenced market trends.
• Investors remain cautious due to the risk of a GDP forecast cut and unfavorable inflation dynamics.

The domestic benchmark equity indices, Sensex and Nifty, concluded on a high note recently, with a significant surge in the realty sector. The Nifty Realty sector outperformed, marking an increase of over 3 per cent. The Sensex ended at 80,248.08, higher by 445.29 points or 0.56 per cent, while the Nifty 50 ended the day at 24,276.05, up by 144.95 points or 0.60 per cent.

Market experts have attributed this positive trend to several factors. Despite a slump in the Q2 growth rate, the market maintained a positive bias as the core sector output in October showed signs of recovery. The slowing earnings growth has already been factored into the market, and mid and small caps are rebounding. However, investors remain marginally cautious ahead of the RBI policy this week due to the risk of a cut in GDP forecast.

The current inflation dynamics are not favorable for a rate cut in the short term, and the RBI is likely to turn more realistic on its growth projection for FY25. On the broader market front, the Nifty Midcap 100 closed 1.08 per cent higher, while the Nifty SmallCap 100 ended up 1.04 per cent.

Sectoral Performance and Market Analysis

On the sectoral front, Nifty Realty, Metal, Media, Auto, IT, Financial Service, Pharma, Energy, Private banks, Infra, Commodities ended in green, while Nifty PSU Bank, PSE and FMCG ended in red. In the Sensex pack, UltraTech Cement, JSW Steel, Adani Ports, Tech Mahindra, M&M and Maruti were among the top gainers. On the other hand, NTPC, Hindustan Unilever, Kotak Mahindra Bank, IndusInd Bank, L&T and PowerGrid were among the top losers.

On the Bombay Stock Exchange (BSE), 2,509 shares were traded in green and 1,547 in red, with no change in 181 shares. Rupak De, Senior Technical Analyst, LKP Securities, noted that Nifty moved up after absorbing the initial weakness, as the index surpassed 24,200. He added, It formed a green candle following a bullish harami pattern on the daily timeframe. In the short term, 24,420 remains a tough hurdle. A decisive move above this level could trigger a rally towards 24,770. On the lower end, support is placed at 24,100 and 24,000.

Investors' Wealth and RBI's Role

In related news, investors' wealth rose by Rs 3.25 lakh crore, as the market capitalisation of BSE-listed companies rose to Rs 449.72 lakh crore, from Rs 446.47 lakh crore in the previous session. The biggest Nifty gainers were UltraTech Cement, Apollo Hospitals, Grasim Industries, JSW Steel and Shriram Finance, while the losers included HDFC Life, Cipla, NTPC, SBI Life Insurance, Britannia Industries.

The market commenced the December month on a tepid note, but the Auto and Pharma segments, along with select heavyweights, supported the Index to recover from the lower levels. Follow-through momentum in the second half of the trading session pushed the Index higher to close the trade at 24,276.05 with gains of 144.95 points. Barring PSU Banks and FMCG, all other sectors ended the day in green with Realty and Metal being the top performers.

The RBI's decision to keep the repo rate unchanged at 6.5% for the ninth time in a row has also played a significant role in the market trends. The central bank's stance has been seen as a balance between the need for inflation control and the goal of promoting economic growth. This stability is particularly significant for the real estate sector, as it promotes an environment conducive to investment and expansion. With lower borrowing costs, businesses can better manage their expenses and seek new opportunities, leading to increased demand.