Share Market LIVE Today: Sensex up 350 pts, Nifty above 26,150; rate-sensitive stocks gain

Indian IT stocks are set for a fourth consecutive week of gains, their longest since July 2024. Nifty IT gained the most in two months this week, up 3.9%.

Data showed US retail sales rose less than expected and consumer confidence weakened, bolstering expectations of a Fed rate cut.

Indian IT cos earn a major share of their revenue from the US and a rate cut would support growth.

Shares of Prestige Estates Projects rose over 2% to an intraday high of Rs 1,693.80 on December 5. Brokerage firm Motilal Oswal Financial Services reiterated its 'buy' rating on the stock with a target price of Rs 2,295. This is 38% higher than the current market price of Rs 1,659. The company's strong market share gains in the Mumbai Metropolitan Region, significant traction in the National Capital Region, and scaling up in Pune led the brokerage to reiterate their rating.

The brokerage expects the company's strong pipeline of Rs 77,000 crore to drive a compound annual growth rate of 40% in presales from 2024-25 (Apr-Mar) to FY28. The company's strategic launches, planned over metropolitan regions such as Bengaluru, Mumbai, Goa, and Hyderabad, along with the ongoing inventory of Rs 19,900 crore, are expected to boost its sales performance, with sustenance sales estimated to contribute at least 30% of presales, Motilal Oswal said in a report.

Manappuram Finance Ltd. Friday said its board has approved raising up to Rs 500 crore by issuing non-convertible debentures on a private placement basis.

Hindustan Unilever stock fell almost 6% to an intraday low of Rs 2,286.70, as the stock adjusted for the demerger of the company's ice-cream business, Kwality Wall's (India). The stock had a discovered price of Rs 2,422. As per the demerger plan, which has been approved by various legal and regulatory agencies, HUL shareholders will receive one share of Kwality Wall's (India) for every HUL share owned. Unilever group arm Magnum HoldCo. will acquire majority stake in Kwality Wall's (India).

"The RBI, through a unanimous decision, reduced the repo rate by 25 bps while retaining a neutral stance. This policy shift was coupled with updated projections for FY26, including an increase in the Real GDP growth forecast to 7.3% for FY26 from 6.8% and a revised CPI inflation estimates of 2% from 2.6% for FY26. Furthermore, the RBI announced an Open Market Operations (OMO) purchase of Rs 1 lakh crore in December to inject liquidity, ultimately benefiting credit-sensitive sectors like NBFCs, SFBs, MFIs, auto, real estate and gold financiers. However, Banks will see pressure on their NIMs in the short term," said Vijay Gour, Research Analyst, Mirae Asset ShareKhan.

"For the stock market, the 25 bps rate cut by RBI may reignite momentum. Lower policy rates and improved banking liquidity tend to support credit growth, which could shift investor appetite back towards cyclicals and credit-sensitive sectors. In particular, banks and non-bank financials may see renewed interest — given that the rate cut could enhance net interest margins over time, and the swap facility reduces FX uncertainties for corporates and exporters," said Anirudh Garg, Partner and Fund Manager, INVasset PMS.

Operational disruptions at IndiGo will gradually ease as schedule adjustments, new duty time rules stabilise, Morgan Stanley, Citi analysts said while the airline stock declined 2.5% on December 5.

However, Citi says airline's on-time performance will remain weak in near-term, full normalisation could take longer despite short-term fixes.

Morgan Stanley sees rising costs from salaries, rupee depreciation, fuel expenses to pressure margins through FY26; cuts FY7-FY28 EPS estimates by 20%.

Nifty Financial Services rose 0.8%, while Bank Nifty and PSU Bank index rose 0.5% and 1%, respectively, after the rate cut decision.

Lower rates make borrowing cheaper, aiding loan demand and reducing funding costs, which help banks and non-bank lenders.

Cheaper loans improve the affordability of vehicles and homes and support demand in the auto and real estate sectors.

Rate-sensitive auto index rose 0.5%, while realty index gained 1.2%.

As expected, and staying committed to its mandate of inflation targeting central bank, RBI’s MPC cut policy repo rate by 25 bps via a unanimous vote. We believe that there would be scope for another 25 bps cut this cycle, as inflation is expected to remain benign and despite high real GDP print there are no signs of overheating in the economy. The all-time low print of inflation ex gold, silver, food and petroleum products ( ex of covid period) confirms the same.

The MPC decided to vote in favour of growth despite ongoing robust growth in the economy. The unanimous nature of the decision in cutting rates by 25 bp reflects the consensus in the MPC that giving further boost to growth is a risk worth taking even in the context of depreciating rupee.

The projection of 7.3% GDP growth for FY 26 is positive for the market. Banks will like the policy decision overall but are unlikely to respond very positively to the rate cut since their NIMs will come under pressure and they will face difficulties in mobilising deposits if deposit rates are lowered. However, rate sensitives like autos and real estate stand to gain from the rate cut.

The Reserve Bank of India’s Monetary Policy Committee (MPC) decided to cut repo rate after keeping rates unchanged for two times in a row to 5.25 percent from 5.5 percent earlier, announced Governor Sanjay Malhotra on December 5. The MPC kept the stance unchanged at 'Neutral'. The decisions were taken unanimously by the six-member rate-setting panel.

At 09:25 am, the Sensex was flat at 85,265.74, and the Nifty was up 7.2 points at 26,040.95. About 1261 shares advanced, 1365 shares declined, and 158 shares unchanged.

ITC Hotels Block Deal: 18.75 crore shares (9% equity) worth Rs 3,856 crore change hands at Rs 205.65 per share in block deal window

Rupee Opens At 89.84/$ Vs Thursday’s Close Of 89.98/$

Fund managers weigh strong GDP, soft inflation, and INR depreciation concerns as RBI is set to announce the Monetary Policy Committee (MPC) decision on interest rate cut. A recent Moneycontrol Poll estimates that the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is likely to cut repo rate by 25 basis points (bps) in the upcoming monetary policy.

The Bank Nifty consistently defended the 59,000 level and stayed above the 20 DEMA for another session. The banking index may reclaim 59,500 on the RBI policy day, and sustaining above it can drive the index toward 60,000–60,100, while falling below it may lead to further consolidation with support at the 59,000–58,900 zone, experts said.

Foreign investors (FIIs/FPIs) net sold Indian equities worth Rs 1,944 on Friday, December 4. At the same time, domestic institutional investors (DIIs) net bought shares worth Rs 3,661 crore, according to provisional exchange data. DIIs purchased shares worth Rs 16,489 crore and sold shares worth Rs 12,828 crore. In contrast, FIIs bought shares worth Rs 11,500 crore but sold shares totalling Rs 13,444 crore.

For the year so far, FIIs have been net sellers of shares worth Rs 2.67 lakh crore, while DIIs have net bought shares worth Rs 7.20 lakh crore.

The IT shares extended their gains for a second straight session on Thursday, outperforming a volatile broader market. The Nifty IT index rose around 1.5 percent, after closing more than 1 percent higher on Wednesday.

Foreign Institutional Investors offloaded equities worth Rs 3,206.92 crore on Wednesday, marking the fifth straight session of outflows. Persistent selling by overseas investors has continued to put pressure on domestic equities.

The rupee fell 28 paise to a fresh low of 90.43 against the US dollar in early trade. A weakening currency typically dampens market sentiment as it prompt foreign investors to turn cautious.

InterGlobe Aviation, Dr. Reddy's Laboratories and Kotak Mahindra Bank were among the major laggards in the Nifty50 pack, declining up to 2 percent, while Tata Consultancy Services and Tech Mahindra Limited were the top gainers, rising up to 2 percent.

The equity benchmarks pared some of their gains in a highly volatile session on Thursday as profit-booking pulled the indices off their intraday highs. The Sensex slipped about 200 points from its peak, while the Nifty fell below 26,050 during the session.

On Thursday, the BSE Sensex settled 158.5 points or 0.2 percent higher at 85,265.3, while the Nifty advanced to 26,033.8, up 47.8 points. Indian benchmarks snapped a four-day losing run in yesterday's trading to close in green.