On 5th December 2024, Indian stock markets continued their bullish trend, with major indices, including the Nifty 50 and Sensex, closing higher for the fifth consecutive day. Investors are showing confidence in the market, driven by expectations of a monetary policy cut from the Reserve Bank of India (RBI) scheduled for Friday. This move is expected to boost liquidity and increase banks’ profitability, giving a boost to the broader market.
Stock Market Analysis for 5th December 2024 – Indices Performance
| Index | Price | Change | % Change |
|---|---|---|---|
| NIFTY 50 | 24,708.40 | +240.95 | +0.98% |
| SENSEX | 81,765.86 | +809.53 | +1.00% |
| NIFTY BANK | 53,603.55 | +336.65 | +0.63% |
| NIFTY IT | 44,806.40 | +857.15 | +1.95% |
| BSE SMALLCAP | 56,707.78 | +90.32 | +0.16% |
Breakdown of Index Performances
Nifty 50:
The Nifty 50 index ended at 24,708.40, up by 240.95 points or +0.98%. The Nifty 50 has been on an upward trajectory for the last five sessions, supported by optimism around RBI’s upcoming policy decision and better earnings expectations for Q3FY25.
Sensex:
Sensex showed a similar upward momentum, closing at 81,765.86, up by 809.53 points, or +1.00%. This broad-based rally reflects investor optimism, especially ahead of crucial policy announcements. The index benefited from strong performances in key stocks like HDFC Bank, TCS, and Infosys.
Nifty Bank:
The Nifty Bank index closed at 53,603.55, up by 336.65 points, or +0.63%. Banking stocks are showing positive momentum ahead of the RBI’s monetary policy, with expectations that a CRR cut could boost liquidity, enhancing profitability for banks.
Nifty IT:
The Nifty IT index posted the strongest gain among all sectors, closing at 44,806.40, up by 857.15 points, or +1.95%. This sector’s performance is particularly notable given the anticipation of a Q3FY25 earnings revival, and strong performances from IT giants like TCS, Infosys, and Wipro. The rally in tech stocks suggests that the market is positioning for a solid performance from the IT sector as we head towards the end of the year.
BSE Smallcap:
The BSE Smallcap index rose to 56,707.78, gaining +0.16%. While the small-cap stocks showed gains, they were more muted compared to the larger indices. This sector’s gains were supported by stock-specific movements, as investors remain cautious but optimistic in smaller stocks that could see value as earnings improve.
Top Gainers
| Company | Current Price (₹) | % Gain |
|---|---|---|
| TCS | 4,464.05 | +2.52% |
| Infosys | 1,934.85 | +2.41% |
| Titan Company | 3,441.05 | +2.28% |
| Trent | 6,970.10 | +2.14% |
| Dr. Reddy's Labs | 1,239.85 | +2.00% |
Top Losers
| Company | Current Price (₹) | % Loss |
|---|---|---|
| SBI Life Insurance | 1,431.85 | -1.43% |
| Bajaj Auto | 8,891.95 | -1.19% |
| HDFC Life | 643.15 | -1.09% |
| NTPC | 369.15 | -0.97% |
| Grasim | 2,706.80 | -0.39% |
FII/FPI (Foreign Institutional Investors/Foreign Portfolio Investors)
| Category | Buy Value (₹ Crores) | Sell Value (₹ Crores) | Net Value (₹ Crores) | Explanation |
|---|---|---|---|---|
| FII/FPI | 24,716.78 | 16,176.87 | 8,539.91 | FIIs were net buyers with a positive net value of ₹8,539.91 crores, indicating strong foreign investor confidence in the market. |
| DII | 13,395.84 | 15,699.48 | -2,303.64 | DIIs were net sellers with a negative net value of ₹2,303.64 crores, showing cautious sentiment in the domestic market. |
Market Insights
Monetary Policy and CRR Cut Expectations:
Investors are hopeful that the RBI’s monetary policy on Friday will bring in a cut in the Cash Reserve Ratio (CRR), which would ease liquidity conditions in the economy. This is expected to boost profitability for banks and improve the market’s overall sentiment.
Earnings Revival Anticipation:
After a lackluster Q2 earnings season, there is growing anticipation for a recovery in earnings from Q3FY25. Investors are eyeing sector-specific opportunities, with IT stocks leading the charge due to their strong earnings growth projections.
Global and Domestic Factors:
Globally, markets are responding positively to economic data, and this optimism is reflected in Indian markets. The domestic economic recovery also continues to play a significant role in shaping investor sentiment.
Powell Signals Support for Slower Rate Cuts Amid Strong U.S. Economy
U.S. Federal Reserve Chair Jerome Powell stated that the economy is stronger than expected, with lower risks in the labor market, stronger growth, and slightly higher inflation. He suggested that the central bank could adopt a more cautious approach in reducing interest rates as it aims to find a neutral stance.
Conclusion
On 5th December 2024, the Indian stock market showed resilience, with the Nifty 50 and Sensex posting strong gains. The Nifty IT and Nifty Bank sectors were the primary drivers of the rally. Investors are betting on an imminent CRR cut by the RBI, which would boost liquidity and support the financial sector. The market’s positive sentiment, ahead of the monetary policy announcement, suggests that India’s economic recovery story remains intact, with earnings growth expected to revive in Q3FY25.