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The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will announce important policy decisions on December 6, 2024, at 10:00 am. This three-day meeting, beginning on December 4, is very important because it is the first time in over two and a half years that the MPC will focus more on slowing economic growth.

The RBI has kept one of its main interest rates at 6.5% during the last ten meetings. They are concerned about high food prices, which are driving inflation up but have also been positive about growth because of good monsoon rains and hopes for increased investments in businesses.

RBI Governor, Shaktikanta Das, has ruled out cutting interest rates right away, but there are worries that the policies might be slowing down economic activity. Recently, Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal have called for lower borrowing costs to help boost growth.

Many bond traders think a rate cut is coming soon, as bond yields are falling. Economists like Teresa John believe the RBI will recognize the need for support for the economy and will likely cut rates next year. However, she suggests they might surprise everyone with a cut now.

The RBI is also expected to lower its economic growth forecasts due to disappointing growth numbers. Economists have reduced their predictions too. For example, Goldman Sachs now expects growth to be only 6% instead of 6.4%. Meanwhile, inflation has risen above the RBI’s target of 4%.

This situation makes it challenging for the RBI. Changes in food prices have caused inflation to reach 6.2%, the highest rise in over a year. Economists point out that the RBI might lower its annual growth prediction by 0.3% to 0.4% while increasing its inflation forecast.

There’s also talk that more MPC members may support an interest rate cut, especially since one member already voted for it. This could lead to at least two members voting to lower the key rate to help boost growth.

Furthermore, the RBI might introduce additional liquidity measures due to recent capital outflows and pressure on the Indian rupee. The rupee has been dropping in value, which means any cuts might further weaken it.

Liquidity in the banking system is tight due to the RBI’s large interventions and cash outflows. Analysts think the RBI could cut the Cash Reserve Ratio (CRR), which is the amount of money banks need to keep on hand, as a way to signal upcoming monetary easing.

People are also curious about who will be the next RBI Governor since Das’s term ends on December 10. Last time he was extended, it was announced well in advance.

Rahul Sharma, a director at JM Financial Services, has positive news about the stock market. He believes it’s a good time to buy stocks after a little drop, and that we might see the Nifty index reach 24,800 points soon. The Nifty has recently crossed 24,500 points, which is a good sign.

After gaining around 500-600 points in a few days, the market is now seeing some corrections—a slight drop is normal after such rises. Sharma suggests that during this dip, investors should consider buying stocks. He points out that bank stocks, especially private banks like ICICI and HDFC, are currently looking strong and likely to lead the market in the next week or two.

Even though today saw some corrections, blue-chip stocks like Infosys, Reliance, and TCS are driving the market higher. Sharma predicts the Bank Nifty could hit 54,000-54,500 in the near future, and the Fin Nifty could reach 25,000-25,200.

When it comes to private vs. public sector banks, Sharma favors private banks for quick gains. However, he sees potential in public banks too for long-term investments.

Sharma also recommends several stocks related to financial markets like CDSL, BSE, and Angel One. CDSL and BSE have done well recently, but he advises booking profits in those, while Angel One may continue to rise.

For pharmaceutical stocks, Divi’s Laboratories is performing well, and he suggests buying it around ₹6,000 with hopes it could rise to ₹6,500.

Finally, Sharma suggests investing in companies that could benefit from increased spending on infrastructure, like Larsen & Toubro and NTPC, which could provide a return over the next three months as the country’s economy improves.