Nifty 50: Nifty rose this week on RBI rate hike pause

Stock Market This Week

The week was a holiday-shortened week with two holidays. The key highlight of the week was RBI's meeting outcome. The equity market ended higher for the week. Let us look at how it shaped up this week.

The Indian equity market traded flat most of the day on Monday. It closed marginally higher on the first trading day of the new financial year as investors looked forward to RBI's meeting outcome later in the week. After the encouraging auto numbers for the previous quarter, the Auto index zoomed on Monday as it climbed 1.2%. FMCG and Metal ended in the red.

The Indian equity market was closed on Tuesday on account of Mahavir Jayanti.

On Wednesday, the Indian equity market closed higher, ignoring weakness in global peers. Gains were largely led by financials, IT, FMCG, metal, and pharma stocks. Both major indices gained nearly a percent. The top gainers for the day were Larsen and Toubro, Coal India, Hero MotoCorp, and Bajaj Auto. Investors looked forward to the RBI's MPC meeting outcome.

On Thursday, the Indian equity market gave the initial loss to close higher as investors cheered no rate hike by RBI in their MPC meeting. Governor Das said that the GDP grew 7% in 2022-23 and added that the growth indicates the economic conditions are resilient. Among sectors, the realty index added 3%, the auto index gained 1%, while pharma, capital goods, oil & gas, Power up 0.5% each.

The equity market is to remain closed on Friday on account of Good Friday.

Key highlights of the week:

OPEC cut oil production: OPEC and its allies, including Russia, decided to widen crude oil production cuts to 3.66 million barrels per day (bpd) or 3.7% of global demand. The surprise announcement helped push up prices by $5 per barrel to above $85 per barrel this week. Saudi Arabia has said voluntary output cuts of 1.66 million bpd on top of the existing 2 million bpd cuts were made as a precautionary measure aimed at supporting market stability. Redburn research said the size of the latest cut was probably overdone unless OPEC feared a major global recession.

Gold & Silver price rally this week: Aided by plunging treasury yields and the weakening greenback, gold prices zoomed this week. In the domestic markets, as measured by spot prices in the national capital, the gold price rallied Rs 1,025 to touch a lifetime high of Rs 61,080 per 10 grams, as per HDFC Securities. Silver also zoomed to Rs 73,950 per kilogram. The dollar eased after weak US economic data fanned expectations that the Federal Reserve might loosen its monetary policy trajectory.

Reliance's Jio-FS listing: As per Jefferies, RIL's foray into financial services with Jio-FS will open an opportunity to play in India's consumer/ commercial loans & NLF side. Demerger & listing can take 6 months & build-up of the franchise may be staggered as tech/analytics/ recovery platforms may need to be built in-house. It added that Jio-FS' first port of call could be consumer lending (especially electronics) & merchant financing. It added JFS's key advantage will be low funding cost/ better access on the back of the group's high credit rating & ownership of a 6.1% stake in RIL.

RBI MPC Outcome: The central bank held its key repo rate steady, after having raised it at each of six previous meetings, as risks to growth have risen following recent global financial turmoil. The RBI Governor also said that the withdrawal of accommodation and that the repo rate hike has been paused only for this meeting. Also, RBI’s rate-setting panel has projected India's real GDP to grow at 6.5% in FY24 from the 6.4% forecast earlier. 

Market this week India: Top Nifty gainers and losers

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