IGI Logo

Below the Quote on Market by Krishna Appala, Sr. Research Analyst, Capitalmind Research

The broader markets witnessed a good recovery this week, with the Nifty 50 gaining 3.2%, while the Midcap and Smallcap indices rose by 3.5% and 3.3%, respectively. A key highlight was the RBI’s decision to cut the CRR rate by 50 basis points to 4%, injecting ?1.1 lakh crore of liquidity into the banking system. Alongside this, the RBI revised India’s GDP forecast downward from 7.2% to 6.6%. FII also signalled a slow return, as data from the first week of December revealed a net cash market inflow of approximately Rs.14,000 crores. This comes as a welcome relief after the relentless selling pressure witnessed in November 2024.

However, challenges remain. The Q2 GDP growth figure came in at a disappointing 5.4%, the slowest pace in seven quarters. The revised FY25 GDP guidance of 6.6% underscores the need for the government to ramp up capital expenditure in the second half of the fiscal year, following a lacklustre performance in H1FY25.

Looking ahead, growth is expected to become increasingly scarce. In this environment, sectors and companies capable of delivering consistent, sustainable growth over the next 3-5 years will likely continue to attract premium valuations in the market.

Above views are of the author and not of the website kindly read disclaimer