Benchmarks eke out slim gains; Nifty at new peak ahead of RBI decision

Domestic equity benchmarks ended modestly higher on Thursday, with the Nifty settling at a fresh record, as investors largely remained in a wait-and-watch mode ahead of RBI's policy decision amid mixed global cues.

After scaling an all-time intra-day peak of 44,953.01, the 30-share BSE Sensex pared some gains to end 14.61 points or 0.03 per cent higher at 44,632.65.

Similarly, the broader NSE Nifty touched a fresh intra-day high of 13,216.60, before settling 20.15 points or 0.15 per cent up at 13,133.90 -- its lifetime closing high.

Maruti was the top gainer in the Sensex pack, rallying 7.45 per cent, followed by ONGC, Asian Paints, NTPC, SBI, Bajaj Finserv and Tata Steel.

HDFC Bank was the top laggard, skidding 2.13 per cent, after the RBI temporarily barred it from launching digital banking initiatives and issuing new credit cards after taking a serious view of service outages at the country's largest private sector lender over the last two years.

TCS, Bajaj Auto, Infosys, Bharti Airtel, M&M and HDFC were among the losers, shedding up to 1.48 per cent.

Global markets were mixed as investors digested a raft of economic data and progress on the Covid-19 vaccine front.

"It's a kind of choppy trading day for domestic equities. However, a strong rebound was seen in PSU Banks. Additionally, metals, realty and auto stocks witnessed decent traction... As expected, mid-cap and small-cap stocks continued to outperform the large-caps, which may persist even in coming days.

"A sideways trading was broadly expected ahead of outcome of RBI policy meet. Having witnessed sharp rebound over last one-month, Nifty valuations appear to be quite stretched and required earnings growth to sustain valuations is fairly high. Hence, any negative development or adverse news flow might lead to a sharp sell-off. Hence, investors should focus on quality names with decent margins of safety," said Binod Modi, Head Strategy at Reliance Securities.

The RBI will announce its monetary policy decision on Friday amid expectations that the central bank will maintain status quo on lending rates in view of high retail inflation.

Sector-wise, the BSE metal, utilities, oil and gas, power, auto and basic materials indices climbed up to 2.53 per cent, while IT, teck, finance and bankex ended in the red.

Broader BSE midcap and smallcap indices ended up to 0.85 per cent higher, outperforming the benchmark.

The recovery in the Indian services sector sustained in November as new work orders supported business activity growth and the first rise in employment in nine months, a monthly survey showed.

Despite falling from 54.1 in October to 53.7 in November, the seasonally adjusted India Services Business Activity Index was still indicative of a solid pace of expansion amid better demand conditions and a relaxation of COVID-19 restrictions.

Elsewhere in Asia, bourses in Hong Kong, Tokyo and Seoul ended with gains, while Shanghai closed lower.

Stock exchanges in Europe were trading on a negative note in early deals.

Meanwhile, the global oil benchmark Brent crude futures rose 0.68 per cent to USD 47.92 per barrel.

The rupee slipped for the second straight day to end 12 paise lower at 73.93 against the US dollar.