Sensex, Nifty end at record closing on Friday; Indian share market cheers RBI decisions

Domestic equity indices closed at record levels on Friday. S&P BSE Sensex closed at 45,079 while the 50-stock NSE Nifty ended at 13,258. ICICI Bank, UltraTech Cement, Sun Pharma, and Bharti Airtel were the top Sensex gainers. Only five of the 30 Sensex constituents closed with losses on Friday. These included Reliance Industries, Bajaj Finserv, HCL Technologies, NTPC, and HDFC. Midcap and Smallcap indices, after having opened higher than the benchmarks saw some profit booking and closed underperforming Sensex and Nifty.

Deepak Jasani, Head of Retail Research, HDFC Securities 

“Indian benchmark equity indices rallied and closed at another record high after the RBI kept rates on hold and did not announce steps to withdraw liquidity in the system. It raised the growth forecasts as well as inflation forecasts. Asian shares scaled a record high on Friday on growing prospects of a large U.S. economic stimulus package. European markets edged slightly higher on Friday as investors monitor prospects of a U.S. stimulus package and a last-minute Brexit trade deal. The MSCI’s emerging market currency index stood at 2 1/2-year high, having gained more than 10% from its March trough. Nifty closed the week up for the fifth consecutive week. While the trigger of RBI policy is out of the way, markets globally now look forward to rising chances of an early US economic stimulus package. Post a good weekly close, we may see some more upside in the early part of the week”

Ajit Mishra, VP – Research, Religare Broking 

“Markets managed to post decent gains on Friday amid volatility. All eyes were on the RBI policy meeting outcome and the dovish commentary from the RBI and improved growth outlook lifted sentiments. With all the major events behind us, we feel global cues would dictate the market trend ahead. Besides, news related to COVID vaccines will also be in focus. Mostly rate-sensitive ended on strong footing and we may see follow-up buying next week. Having said that, traders should not get carried away with the prevailing buoyancy and stick to quality names as we can’t ignore the possibility of an intermediate corrective phase.”

Vinod Nair, Head of Research at Geojit Financial services 

“RBI’s decision to keep policy rates unchanged and maintain an accommodative stance for the current and upcoming year is well taken by the market. The possibility for a further rate cut in the near term can be ruled out considering the elevated levels of inflation. However, positively RBI has ensured ample liquidity support on a timely basis in the form of Open market operation, TLTRO and reverse repo. Globally, renewed US stimulus negotiation and vaccine roll-out has underpinned optimism, this will help the domestic market to maintain its euphoria.”

Nirali Shah, Senior Research Analyst, Samco Securities

Nifty50 index managed to attain positive returns for the fifth consecutive week however, the week saw a legit struggle between large and small caps. Large caps faced profit booking and were mired down by the selling pressure from the domestic institutions, whereas small and midcaps were lapped up by retail investors. A sectoral rotation theme will be witnessed in the markets in the coming weeks wherein beaten down sectors pick up momentum and witness traction. In general, IT, FMCG and Pharma are in a prolonged phase of consolidation and are unlikely to witness any significant buying at least till this year end.”