Markets likely to get flat-to-positive start; CPI, IIP data eyed

Indian markets closed higher in restricted trade on Wednesday as investors awaited key US inflation data for further cues. Today, markets are likely to get flat-to-positive start tracking gains in global peers. Investors will react to the US inflation rate, which accelerated for the second month in a row, marking the largest gain in seven months. This has also cemented Fed rate cut hopes. Besides, India retail inflation likely fell to 5.53 per cent in November after breaching the central bank's 6 per cent upper tolerance band as the arrival of fresh produce to markets moderated soaring vegetable prices. Retail inflation data of India of the month of November is scheduled for later today. Investors will also be eyeing Industrial production data for October to be out later in the day. Traders may take note of Finance Minister (FM) Nirmala Sitharaman’s statement that the priority of the government for next decade should be to reduce the debt burden and borrow only to build assets. Moreover, Sanjay Malhotra, the newly appointed governor of the Reserve Bank of India (RBI), stressed continuity, stability, and inclusivity in policy making as the guiding leadership principles for the storied institution that, he said, symbolised both unwavering commitment to public good and inherent dynamism to help meet new-age challenges. However, foreign fund outflows likely to dent sentiments in the domestic markets. Foreign Institutional Investors sold shares worth Rs 1,012.24 crore on December 11. Some cautiousness may continue in the markets after the Asian Development Bank (ADB) lowered India’s economic growth forecast to 6.5 per cent for the current financial year from its earlier estimate of 7 per cent due to lower-than-expected growth in private investment and housing demand. Stocks related to logistics sector will be in focus as Union Minister for Road Transport and Highways, Nitin Gadkari said that changes in the cost of fuel and road can bring the logistics cost to nine per cent. The Union Minister stated that savings made by reducing the fuel and road cost will significantly help the state to strengthen its export capabilities. In the primary market, Inventurus Knowledge Solutions IPO will open for subscription. One Mobikwik Systems IPO, Vishal Mega Mart IPO, Sai Life Sciences IPO will enter Day 2 of their subscription.

The US markets ended mostly in green on Wednesday after an in-line inflation reading kept intact bets on the Federal Reserve cutting interest rates later this month. Asian markets are trading mostly higher on Thursday tracking the overnight gains on Wall Street.

Back home, Indian equity markets witnessed another muted trading session on Wednesday as traders awaited inflation data from the US later in the day and from India a day later. Persisting geopolitical tension due to escalating violence in Syria also weighed on market sentiment. After a positive start, markets faced volatility during the whole day, as Union finance minister Nirmala Sitharaman said that inflation is a big challenge for the world and the major reason for that is ‘disruption’. Adding some anxiety, the Asian Development Bank (ADB) lowered India's economic growth forecast to 6.5 per cent for the current financial year from its earlier estimate of 7 per cent due to lower-than-expected growth in private investment and housing demand. However, markets managed to keep their heads above water for the most part of the trading session, as the rating agency S&P Global Ratings in its latest India Outlook has said that the Indian economy is set for resilient growth in 2025 on the back of strong urban consumption, steady services sector growth, and ongoing investment in infrastructure. The global ratings agency kept the FY25 gross domestic product (GDP) growth outlook unchanged at 6.8 per cent amid slower fiscal impulse tempering urban demand. Market participants got some support as foreign institutional investors (FIIs) bought equities worth Rs 1,285.96 crore on December 10. On the sectoral front, solar industry stocks remained in watch, as Ministry of New and Renewable Energy has unveiled a significant amendment to the Approved Models and Manufacturers of Solar Photovoltaic Modules (ALMM) Order, 2019 which will have far-reaching implications for India’s solar power sector and its clean energy transition. This amendment introduces the long-awaited List-II for solar PV cells under the ALMM framework. Finally, the BSE Sensex rose 16.09 points or 0.02% to 81,526.14, and the CNX Nifty was up by 31.75 points or 0.13% to 24,641.80.