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regular-article-logo Tuesday, 23 July 2024

Sensex crosses 70000 after RBI raises growth forecast to 7 per cent for current fiscal

The benchmark index came off the record peaks as investors awaited the release of inflation prints both in India and the US on Tuesday and the US Federal Reserve’s interest rate decision on Wednesday

Our Special Correspondent Mumbai Published 12.12.23, 11:54 AM
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The Sensex on Monday scaled Mount 70000, buoyed by the Reserve Bank of India’s (RBI) benign commentary on inflation and its decision to raise the growth forecast to 7 per cent for this fiscal.

The benchmark index came off the record peaks as investors awaited the release of inflation prints both in India and the US on Tuesday and the US Federal Reserve’s interest rate decision on Wednesday.

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After opening with gains of over 100 points to the previous close, the 30-share gauge added 232.23 points to hit a record intra-day high of 70057.83.

However, profit booking saw the index giving up some of these gains to close at 69928.53, a rise of 102.93 points.

Brokers said the sentiment turned cautious given the rally seen over the past few sessions and an eventful week ahead.

On Tuesday, retail inflation numbers will be released both in India and the US. Economists are of the view that the headline CPI (consumer price index) number for India in November will be higher than the 4.9 per cent seen in November because of high food prices.

RBI governor Shaktikanta Das alluded to this possibility at the end of the monetary policy committee meeting on Friday.

Later in the day, the investors will track the headline number in the US which is expected to come flat at 3 per cent.

Late on Wednesday, the global markets will watch out for the interest rate decision from the US Fed.

While Fed chair Jerome Powell is widely expected to announce a status quo, its guidance on whether there will be one more rate hike and the road map towards a cut sometime in 2024 will be keenly tracked by investors.

“The Sensex crossed 70,000 levels Monday, while the broader market outperformed the main indices.

“However, profit booking was evident at higher levels as traders anticipated clues from Tuesday’s significant data releases on inflation from the US and India, as well as the IIP (index of industrial production,” Vinod Nair, head of research at Geojit Financial Services, said.

Analysts expect stock prices to consolidate prior to the Christmas holidays, with occasional corrections of a small magnitude.

SpiceJet snag

Crisis-hit SpiceJet's board of directors will continue to discuss fundraising plans on Tuesday after it could only partially complete the agenda items on Monday.

On Monday, the no-frills airline's shares touched a 52-week high and ended with more than 10 per cent gains on the BSE as investors were enthused by funding plans and the proposal to list the company's securities on the National Stock Exchange (NSE).

In an evening filing to the BSE, SpiceJet said its board on Monday "could only partially complete the agenda items and the meeting has now been adjourned to December 12, 2023 (Tuesday)".

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