• The Indian stock market ended flat following the Reserve Bank of India's Monetary Policy Committee decisions on repo and CRR rates.
• The central bank's decision to maintain the repo rate while cutting the Cash Reserve Ratio resulted in an infusion of Rs 1.16 lakh crore into the banking system.
• Several companies experienced losses, while others like Tata Motors, Axis Bank, Maruti, L&T, and ITC emerged as top gainers.
• The market's response to the RBI's decisions reflects the balance between managing inflation and fostering economic growth, highlighting the impact of global economic trends and institutional investors.

The Indian stock market concluded on a flat note on Friday, following the announcement of the Reserve Bank of India's Monetary Policy Committee (MPC) decisions on repo and CRR rates. The market's lukewarm response was primarily due to selling observed in the IT, financial services, and pharma sectors, while buying was seen in auto and metal stocks. The Sensex, a benchmark index of the Bombay Stock Exchange, settled at 81,709.12, marking a decrease of 56.74 points or 0.07 per cent. Concurrently, the Nifty, the National Stock Exchange's key index, ended at 24,677.80, down by 30.60 points or 0.12 per cent.

Market Response to MPC's Decisions

The MPC's decision to maintain the repo rate at 6.5 per cent while implementing a 50 basis point cut in the Cash Reserve Ratio (CRR) to 4 per cent was a significant highlight of the meeting. This strategic move by the central bank resulted in an infusion of Rs 1.16 lakh crore into the banking system, a move aimed at stimulating economic activity. The Nifty Bank index, which represents the banking sector, ended at 53,509.50, down by 94.05 points or 0.18 per cent. Meanwhile, the Nifty Midcap 100 index, representing medium-sized companies, closed at 58,704.60, gaining 263.05 points or 0.45 per cent. The Nifty Smallcap 100 index, representing small-sized companies, closed at 19,492.10, rising by 158.55 points or 0.82 per cent.

Top Gainers and Losers

In the Sensex pack, several companies experienced losses, including Bharti Airtel, Asian Paints, IndusInd Bank, Bajaj Finserv, Reliance, Infosys, and UltraTech Cement. On the other hand, Tata Motors, Axis Bank, Maruti, L&T, and ITC emerged as the top gainers. Krishna Appala of Capitalmind Research noted that the broader markets witnessed a good recovery this week. The Nifty 50 gained 3.2 per cent, while the Midcap and Smallcap indices rose by 3.5 per cent and 3.3 per cent, respectively. Appala also highlighted that Foreign Institutional Investors (FIIs) signalled a slow return, with data from the first week of December revealing a net cash market inflow of approximately Rs 14,000 crore. This inflow was a welcome relief after the relentless selling pressure witnessed in November.

Market Trends and Global Impact

The market trend remained positive on the day of the MPC decision. On the National Stock Exchange (NSE), 1,500 stocks were trading in green, while 647 stocks were in red. The policy response of the RBI and the central bank's commentary on the growth and inflation outlook were keenly watched by the market. In Asian markets, the markets of Seoul and Japan were trading in red, while China, Hong Kong, Jakarta and Bangkok were trading in green. The US stock markets closed in red on the previous trading day. Global stock markets experienced downward pressure following the decline in US markets ahead of the Fed rate cuts, falling by over 2% on Tuesday.