(Photo : Indian Market.)

• The Indian stock market closed positively on Wednesday, driven by buying in the PSU bank and realty sectors.
• Investors are awaiting the Reserve Bank of India's decision on the repo rate, which could impact banking stocks.
• Despite volatility due to mixed sentiments in Asian markets, the domestic market maintained a positive trajectory.
• The market's future trajectory will largely depend on the RBI's decision and its impact on investor sentiment.

The Indian stock market ended on a positive note on Wednesday, with the benchmark equity indices closing in the green. The surge was primarily driven by buying in the PSU bank and realty sectors. Investors are now keenly awaiting the Reserve Bank of India's (RBI) monetary policy committee (MPC) decision on the repo rate, which is set to be announced on Friday.

Banking stocks experienced a volatile session due to the potential for a Cash Reserve Ratio (CRR) cut by the central bank. The Sensex settled at 80,956.3, higher by 110.58 points or 0.14 per cent, while the Nifty ended at 24,467.45, up by 10.30 points or 0.04 per cent. The anticipation of a CRR reduction energised banking stocks, pushing the Bank Nifty index over 1 per cent higher. The PSU Banking Index outperformed its private sector counterpart as investors turned optimistic ahead of the RBI monetary policy meeting announcement.

On the broader market front, the Nifty Midcap 100 ended at 58,112.40, higher by 603.40 points or 1.05 per cent, while the Nifty SmallCap 100 ended at 19,173.55, higher by 170 points or 0.89 per cent. Despite some volatility stemming from mixed sentiments in Asian markets due to the situation in South Korea, the domestic market maintained a positive trajectory.

Sectoral Performance and Market Predictions

The banking and financial sectors continued to excel, showing strong performance. However, auto stocks were impacted by mixed November sales results. The upcoming speech by the FED Chair could sway market sentiments, as recent FED minutes have shown confidence in the easing of inflation.

On the sectoral front, Nifty PSU Bank, Realty, Financial Service, IT, Media, Private Bank and PSE ended in green, while Nifty Auto, Pharma, FMCG, Metal, Energy and Infra ended in red. In the Sensex pack, HDFC Bank, NTPC, Bajaj Finserv, Titan, TCS, Tech Mahindra and Bajaj Finance were the top gainers. Bharti Airtel, Tata Motors, Power Grid, Maruti, Reliance and ITC were the top losers.

On the Bombay Stock Exchange (BSE), 2,383 shares were traded in green and 1,582 in red. Whereas, there was no change in 105 shares. According to Rupak De of LKP Securities, the Nifty remained choppy throughout the day as investors exercised caution ahead of the RBI's monetary policy announcement. He added that a decisive move above 24,700 could trigger a continuation of its upward momentum. Conversely, a fall below 24,350 could weaken market sentiment.

Historical Similar Events and Market Trends

In the past, similar events have occurred where the market has shown a positive trajectory ahead of key policy decisions. For instance, in July 2024, the market witnessed strong volatility ahead of the Interim Budget 2024. The Volatility index India VIX jumped 13 per cent. The US Fed policy decision and Fed Chair Jerome Powell's commentary were also on investors' radar. Despite the volatility, the market held on to the support of the 40-day average, which acted as a lower boundary during the consolidation phase.