Markets likely to open lower; IIP, CPI data eyed

Indian markets ended lower on Friday amid weakness in information and technology (IT) sector stocks coupled with selling by foreign portfolio investors (FPIs). Today, markets are likely to open lower on the first trading day of the week amid largely negative cues from global markets. Investors await the country’s November retail inflation data, October’s industrial production (IIP) data set to be released later in the day. Moreover, investors awaited a slew of rate decisions from the US Federal Reserve, the European Central Bank (ECB) and others. Foreign fund outflows likely to dent sentiments in the markets. Foreign institutional investors sold a net of Rs 158.01 crore equities on Friday as per provisional NSE data. Also, FPIs turned sellers in the last four trading sessions and pulled out Rs 3,300 crore as they are adopting a cautious stance ahead of the US Federal Reserve's decision on the interest rate. However, some support may come later in the day as the Reserve Bank of India's (RBI) statistical supplement showed India's foreign exchange reserves rose for a fourth week to an over three-month high of $561.16 billion in the week through December 2. Traders may take note of report that the government has asked trade bodies and banks to explore opportunities for trade in rupee with more countries after having facilitated rupee trade with Russia, Mauritius and Sri Lanka. Besides, the sixth round of negotiations between senior officials of India and the UK for a proposed free trade agreement (FTA) will begin on Monday with an aim to conclude the talks at the earliest, an official said. The negotiations are happening after a brief gap due to recent political developments in the UK. There will be some buzz in the power stocks as latest government data showed that power deficit, or the gap between electricity required and supplied, has fallen from 2 per cent in April this year to 0.2 per cent in November 2022. Aviation industry stocks will be in focus as IATA chief Willie Walsh said the Indian civil aviation market has exciting and significant opportunities but taxation has always been an issue which also makes the industry less competitive. There will be some reaction in col industry stocks as India's thermal coal imports fell to the lowest levels in 9 months during November, data from consultancy Coalmint showed, mainly due to a rise in domestic coal production. Besides, Sula Vineyards and Abans Holdings IPO will open for subscription today. Meanwhile, shares of Uniparts India will debut on the bourses today.

The US markets ended lower on Friday as a measure of consumer sentiment exceeded expectations in December and producer price data for November indicated that inflation is stickie than most assume, complicating the Fed's task to slow the pace of its rapid interest-rate hikes. Asian markets are trading in red on Monday as investors looked ahead to a trio of central bank interest-rate decisions this week.

Back home, Indian equity benchmarks ended lower by over half percent on Friday pressured by heavy selling in IT, Tech and Realty stocks despite a positive trend in the global markets. Key gauges made slightly positive start, as traders took some support with report that India Inc expects private capex to gain further momentum in the short to medium term, as it sees green shoots of revival in sectors like real estate, construction, logistics and chemicals, among others. But, markets soon reversed gains and slipped into red terrain, as rising crude oil prices and relentless foreign capital outflows weighed on sentiment. As per exchange data, Foreign Institutional Investors (FIIs) were net sellers in capital markets as they offloaded shares worth Rs 1,131.67 crore on Thursday. Indian indices came under heavy selling pressure in the second half as sentiments got hit with a private report that the Reserve Bank of India’s curb on securitising loans having residual maturity of less than 365 days may hit the sale of short-term advances like micro-finance, personal loans and gold loans for a while. Traders paid no heed towards report stated that India consumer price inflation likely cooled to a nine-month low of 6.40% in November mainly due to a moderation in food prices. Traders also took a note of Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal’s statement that India will have to face global competition effectively to achieve the goal of becoming a prosperous and developed nation. Finally, the BSE Sensex fell 389.01 points or 0.62% to 62,181.67 and the CNX Nifty was down by 112.75 points or 0.61% to 18,496.60.