This week, the Nifty and Sensex advanced 2.3% and 2.4% respectively, marking their best performance since early June when the national election results assured policy stability. (AI image)

Stock market today: BSE Sensex and Nifty50, the Indian equity benchmark indices, closed in red on Friday, but saw their strongest weekly performance in six months. The market was flat during the day following RBI’s decision to keep repo rate unchanged, but cut the CRR by 50 basis points. BSE Sensex closed the day at 81,709.12, down 57 points or 0.069%. Nifty50 ended the day at 24,677.80, down 31 points or 0.12%.
Indian benchmark indices achieved their strongest weekly performance since June, primarily driven by financial stocks after the central bank reduced the cash reserve ratio (CRR) requirements for banks, effectively loosening monetary conditions.
This week, the Nifty and Sensex advanced 2.3% and 2.4% respectively, marking their best performance since early June when the national election results assured policy stability.
RBI announced on Friday a reduction in CRR by 50 basis points to 4%, the first such adjustment in four years, while maintaining interest rates steady.
“Equity markets got what they wanted from the RBI and have taken the policy outcome in their stride,” said Dhiraj Relli, chief executive of HDFC Securities.
Analysts indicated that the central bank’s worries about recent economic slowdown and high inflation could maintain markets in a consolidation phase, with a positive inclination in the upcoming days.
Financial stocks gained 3% over the previous four sessions, anticipating the CRR reduction, which is expected to benefit lenders’ margins. The index remained largely unchanged for the day.
“The CRR reduction will release about 1.16 trillion rupees ($13.71 billion) into the banking system and is a big positive for the banking sector specifically,” Abhishek Goenka, founder and CEO of IFA Global told Reuters.
Other rate-sensitive sectors showed strong performance, with realty increasing 5.3% and automobiles rising 2.5% this week.
The weekly increase in benchmarks received additional support from IT stocks, which strengthened following Federal Reserve Chair’s comments indicating robust US economic conditions.
IT companies, which derive substantial revenue from the US, recorded a 3.6% weekly gain.
The broader smallcaps and midcaps indices increased 0.8% and 0.5% respectively for the day, concluding the week approximately 4.3% higher.
Among individual shares, Adani Ports registered a 5.8% weekly gain, its strongest since May. The stock has increased about 11% over two weeks, recovering all losses associated with the US indictment of the group chairman. The Group has denied the allegations.