Market Declines for Third Consecutive Session Following RBI’s Repo Rate Cut
Date: February 9, 2025
The Indian equity benchmark indices experienced a downturn for the third straight session on Friday, despite the Reserve Bank of India’s (RBI) recent decision to cut the repo rate. This cut evidently failed to buoy investor sentiment as both the S&P BSE SENSEX and the NSE NIFTY50 index closed lower.
Market Close
At the end of trading on Friday, the S&P BSE SENSEX was registered at 77,860.19, down 197.97 points or 0.25%. The NIFTY50 index followed suit, ending at 23,559.95, a decrease of 43.40 points or 0.18%.
RBI’s Monetary Policy Decision
The RBI’s latest monetary policy meeting, which took place from February 5 to February 7, concluded with a decision to cut the repo rate by 25 basis points, lowering it from 6.5% to 6.25%. This marks the first monetary policy meeting of the RBI in the calendar year 2025.
RBI Governor Sanjay Malhotra, addressing the market, stated that the six-member Monetary Policy Committee (MPC) unanimously agreed on the rate reduction to adopt a ‘neutral’ stance in their monetary policy approach. Initially, the market showed signs of recovery post-announcement, but it ultimately surrendered those gains, sliding back into negative territory.
Global Market Trends
On the global front, European markets largely traded lower as investor activity reflected concerns about economic stability. Conversely, US markets wrapped up mostly higher on Thursday, indicating a mixed international sentiment that could be influencing local markets.
Within Asia, South Korean and Japanese indices closed lower, while the Chinese markets of Shanghai and Hong Kong reported gains. Notably, global oil benchmark Brent crude prices increased by 0.73% to $74.83 a barrel, amidst ongoing fluctuations in the energy sector.
Market Statistics
Trading activity on the BSE showed a total of 4,064 stocks. Of these, 2,402 stocks declined, while 1,520 stocks advanced. A notable 142 stocks remained unchanged throughout the session. Furthermore, 60 stocks reached their 52-week highs, whereas 101 stocks plummeted to their one-year lows. Only a small number of stocks made notable movements, with 10 reaching their upper circuit limits and 4 hitting their lower circuit bands.
Top Gainers and Losers
In the NIFTY50 index, 28 stocks managed to trade positively while 23 concluded the session in the red. The top five gainers were led by Tata Steel, ITC Hotels, Bharti Airtel, JSW Steel, and Trent, posting increases as high as 4.24%. Conversely, the top five decliners included ITC, State Bank of India, Britannia, Adani Ports, and Tata Consultancy Services (TCS), with declines reaching as much as 2.49%.
Broader Market Performance
The broader market showcased a mixed performance. The BSE MidCap index finished higher at 43,039.97, gaining 55.02 points or 0.13%. In stark contrast, the BSE SmallCap index saw a decline, settling flat at 50,581.39, shedding 341.27 points or 0.68%.
Sector Performance Overview
Sector-wise, the BSE Oil and Gas, FMCG, Energy, Industrial, and Capital Goods sectors emerged as the most significant losers, with declines of 1.21%, 1.25%, 1.07%, 0.73%, and 0.73%, respectively. On the other hand, sectors like Telecommunications (up 2.64%), Metal (up 2.40%), Consumer Durables (up 1.23%), Auto (up 0.64%), and Teck (up 0.46%) displayed positive performances.
Conclusion
As investors process the recent changes initiated by the RBI, market observers will be keenly watching for further developments that could influence trading strategies in the upcoming sessions. While some sectors exhibited resilience, the overall market sentiment remains cautious in light of the current mixed signals from both domestic and international markets.
For ongoing updates on market movements and economic developments, stay tuned to Smart Money Mindset.
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