Stock market today: Sensex, Nifty 50 end 1% lower as RBI Monetary policy fails to enthuse investors

Stock market today: Domestic equity benchmark indices, the Sensex and the Nifty 50, ended lower on Thursday's session, weighed down by rate-sensitive sectors, following the Reserve Bank of India's (RBI) expected decision to maintain its key interest rate unchanged for a sixth consecutive meeting.

The 30-share BSE Sensex ended lower by 723.57 points or 1% at 71,428.43 level while the Nifty 50 closed at 21,717.95 level, down 212.55 points or 0.97%.

On the broader market front, the Nifty Midcap 100 was flat (0.05%) today, while the Nifty SmallCap 100 closed 0.4% lower. The fear gauge index, the India VIX rose by 2.7% on Thursday.

Prior to the RBI rate decision, both indices rose by around 0.2%  but they quickly turned negative and continued to decline.

“Though FY25 GDP growth forecast has improved, the RBI remains vigilant on inflation & banking liquidity. The incomplete transmission of the cumulative 250 bps and the inflation ruling above the target level adds uncertainty about the timing of the interest rate reduction. 

The ripple effect was seen in the government 10 year yield, which inched higher. A large pocket of the market slid into red like FMCG, banks, and auto," said Vinod Nair, Head of Research, Geojit Financial Services.

Shares were mostly up in Asia on Thursday as the S&P 500 approached the 5,000 mark for the first time, according to an AP news report. On Thursday, China's smaller primary market saw a 1.3% increase in the Shenzhen Components index, which tracked the Shanghai Composite index, which increased 1.3% to 2,865.90. Mainland China's markets will be closed for the Lunar New Year vacation starting on Friday and continuing into next week.

Despite substantial gains for real estate developers, Hong Kong's Hang Seng slid 1.2% to 15,878.07 due to massive selling of technology companies. The Nikkei 225 in Tokyo gained 2.1% to 36,863.28, while the Kospi in Seoul saw a rise of 0.4% to 2,620.32. The S&P/ASX 200 index in Australia increased 0.3% to 7,639.20. 

Following the release of their most recent quarterly reports, major equities including Ford Motor, Chipotle Mexican Grill, and others saw significant gains on Wednesday, pushing Wall Street closer to yet another record-breaking milestone, according to AP news report.

Top Nifty 50 gainers and losers today

As many as 15 stocks settled in the green in the Nifty 50 index while the rest 34 ended in red.

Shares of State Bank of India (up 3.64%), Bharat Petroleum Corporation Limited (up 3.35%), Power Grid Corporation of India Ltd (up 3.00%), Coal India Ltd (up 1.84%), and Hindalco Industries Ltd (up 1.73%)ended as top gainers.

On the other side, Kotak Mahindra Bank Ltd (down 3.49%), Britannia Industries Ltd (down 3.16%), Axis Bank (down 3.01%), Nestlé India Ltd (down 2.98%), and Eicher Motors Ltd (down 2.97%) were among the laggards.

Sectoral indices today

The negative takeaway was that Nifty Private Banks index dived 2.5%. On the other hand, Nifty PSU Banks surged 2% higher due to anticipation of mark-to-market gains on their government securities holdings.

Nifty Bank (-1.76), Nifty Auto (-1.28), Nifty Financial Services (-1.85), and Nifty FMCG (-2.06) ended in red, while Nifty Oil & Gas (0.93), Nifty Media (1.99), and Nifty IT (0.22) ended in green.

Experts' Views on Markets

According to Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One, the Indian equity markets started on a positive note, just above the 22,000 mark on the eventful day of weekly settlement and MPC outcome. 

However, a sense of tentativeness was always there, and surprisingly, after the commentary, the market witnessed an intense bout of sell-off, eroding all the positive developments and sentiments of the previous session. After a small span of breather, the sell-off aggravated and dragged Nifty lower to conclude the session around 21,700 levels, eroding nearly a percent from the last closure, explained Osho.

Further he stated that the decoupled banking space – private and public has witnessed an extreme performance with strong traction on both sides. Simultaneously, there has been a significant change of hands among the sectors, which kept the traders’ fraternity on their toes throughout the session. In the coming period, we might expect such volatile moves to continue; hence, we would encourage traders to have a pragmatic approach and not get carried away until trends become apparent.

"The strong bearish candle formation on the daily chart might negate the intermediate bullish undertone, though the index's placement is still within the consolidation zone. The 20 DEMA is very much in the vicinity and a breach below could further disrupt the chart structure, and we might witness 21500 in the comparable period. The broader structure remains sideways, with Nifty hovering within a broad range of 500-600 odd points.

On level specific front, 21,500 should be acting as a strong support zone, and till the market sustains above the same, we might witness some buying traction. On the higher end, 21,800-21,900 is likely to act as an intermediate resistance zone, with a sturdy hurdle placed at the 22,000 mark," said Krishan.

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