• Domestic equity markets rose for the third consecutive week as key benchmark indices BSE Sensex and Nifty 50 rose 2.39% and 2.27%, respectively. The rally was broad-based as the mid-cap segment and the small-cap segment both closed the week in green.

• Domestic equity markets rose on expectations of policy easing by the RBI following the weaker-than-expected GDP figure of domestic economy in the second quarter of FY25.

• A positive turnaround from foreign institutional investors to domestic equity markets during the week also boosted the sentiment.

• Among the sectoral indices, Nifty Realty, Nifty Consumer Durables, and Nifty PSU Banks recorded the highest gains of 5.3%, 5.0%, and 5.0%, respectively. The Nifty Realty Index was powered by positive sentiments surrounding government reforms and increased infrastructure spending. The Nifty Consumer Durables Index benefitted from strong performances by key players in the sector. Meanwhile, expectations of a rate cut drove PSU bank stocks higher. In contrast, Nifty FMCG, Nifty Pharma, and Nifty Oil & Gas lagged behind. 

• The monetary policy held the repo rates at 6.50%; which was expected considering that the inflation rate was at 6.21%. There is still the risk of monetary divergence as the Fed has cut rates by 75 bps since September 2024.

• FPIs infused $2.89 Billion during the week into Indian equities and also ended up net buyers in debt as FAR debt attracted a lot of FPI buying. 

• The total gross goods and services tax (GST) revenue grew 8.5% YoY to over Rs 1.82 lakh crore in Nov 2024 as compared to Rs. 1.68 lakh crore in Nov 2023.

• The RBI has projected CPI inflation for FY25 at 4.8% with Q3 at 5.7% and Q4 at 4.5%. CPI inflation for Q1 FY26 is projected at 4.6% and Q2 at 4.0%.

• Bond yields initially fell on expectations of monetary easing by the RBI following the weaker-than-expected domestic economic growth data of Q2 FY25. However, gains were erased after the RBI maintained the repo rate at 6.50% in Dec 2024 monetary policy meeting.

• The subdued prices of crude oil are working in India’s favour. With Crude at $71/bbl, it is sharply down by nearly 20% from its recent peak. 

• The latest US unemployment rate for November 2024 may have just about opened the gates for the US to cut rates by another 25 bps on December 18, 2024; when the Fed meets for the last time in 2024. US unemployment ratio was up marginally from 4.1% to 4.2% for November; but lower than the peak level of 4.3%.

• Gold settled near the $2,632 level in the last session, ending on a flat note amid mixed U.S. economic data.

• Silver advanced over 1% last week, although trading remained choppy amid mixed economic indicators. The metal has moved sideways in recent sessions, reflecting investor caution ahead of the Fed's upcoming monetary policy decision.

Best Regards,

Alpha Research Team

Disclaimer

The above views are our expectations of the economy, market and investments. The views may or may not play out accordingly. You are requested to do your own due diligence before making any investment