Market Wrap: Sensex adds 110 points, Nifty tops 24,450 as bank stocks lead on hopes of RBI CRR cut

Indian markets ended in the green on Wednesday after a three-session winning streak as banking stocks rose on rising expectations of a cut in the Cash Reserve Ratio (CRR) by the Reserve Bank of India (RBI) at the end of the week.

The benchmark S&P BSE Sensex rose 110.58 points, or 0.14%, to settle at 80,956.33, while the broader Nifty 50 index closed up 10.30 points, or 0.04%, at 24,467.45.

The country’s central bank is expected to keep rates steady at its policy meeting on Friday due to elevated inflation. Meanwhile, a possible cut in the cash reserve ratio (CRR) could provide margin support to banks.

Stakes on a cut in CRR helped financials rise 1%, with top-weighted HDFC Bank up 1.6%. HDFC Bank was the top gainer in Nifty and Sensex.

State-owned lenders also advanced, with the Nifty PSU Bank index up 2.2%, led by a 13% gain in UCO Bank.

Newly listed Swiggy shares rose 3.4% after brokerages remained positive on the online food delivery platform’s future earnings outlook.

Expert opinions
Commenting on the day’s proceedings, Vinod Nair, head of research at Geojit Financial Services, said the domestic market maintained a positive trend even as the South Korea situation caused some volatility due to mixed sentiment in Asian markets, adding that broader indicators showed strength. Banking and financial sectors continue to perform well.

“Conversely, auto stocks were affected by mixed November sales results. The upcoming speech by the FED chair could influence market sentiments, as the latest FED minutes showed confidence in inflation easing. Although the implications of US policies under the new administration remain uncertain, the minutes per indicating a likely continuation of the mild cycle,” Nair added.

Global stocks
Global shares traded mixed on Wednesday as markets digested political turmoil in South Korea, where martial law was imposed and lifted hours later. Meanwhile, investors are looking forward to next year’s U.S. Investors are hoping for more signals to gauge a possible policy path by the Federal Reserve, with the highly anticipated November employment report due on Friday.

The political crisis in South Korea sent the benchmark KOSPI index down 1.4%, taking its year-to-date loss to more than 7%. In contrast, MSCI’s broad index of Asia-Pacific shares outside Japan, which counts Samsung Electronics as one of its top components, was largely flat.

Most Asian markets rose except for South Korea.

Global markets are now awaiting the next speech by US Fed Chairman Jerome Powell, who is expected to be his last public comment before the Fed meeting on Wednesday.

Forex
The Indian rupee fell 0.06% to end at a record low of 84.74 per US dollar on Wednesday amid lingering depreciation bias and pressure from broad-based dollar bids.

Meanwhile, the dollar index, which measures the US currency against six peers, rose 0.2% to 106.5.

crude oil
Oil prices rose slightly on Wednesday, with traders expecting OPEC+ to announce an extension to supply cuts this week while heightened geopolitical tensions continued to dominate market sentiment.

Brent crude futures were up 19 cents, or 0.26%, at $73.81 a barrel by 0916 GMT.

On December 3, foreign institutional investors (FIIs) were net buyers, with Rs. Added more than 3,600 crore worth of equity. In contrast, domestic institutional investors (DIIs) were net sellers, adding Rs. 250.99 crore worth of equity was sold.