Sensex, Nifty end flat amid volatility

Indian equity benchmarks ended on a flat note in a highly volatile session on Tuesday as traders remained on sidelines ahead of this week's IIP and inflation numbers, which would be key given the RBI's reluctance to cut rates on the back of higher inflation concerns going ahead. After a flat to positive start, the market traded mostly in positive territory in the first half as traders took some support with private report stating that India retail inflation likely fell to 5.53% in November after breaching the central bank’s 6% upper tolerance band in October as the arrival of fresh produce to markets moderated soaring vegetable prices. Some support also came with the labour ministry stating that retail inflation for farm workers and rural labourers eased to 5.96 per cent and 6 per cent, respectively, in October from 6.36 per cent and 6.39 per cent in September. Besides, exchange data showed Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth Rs 724.27 crore. 

However, profit booking in the second half dragged the markets into red. Traders turned cautious with reports that GST officers have detected cases of ITC evasion of Rs 35,132 crore by 17,818 fake firms between April-October and arrested 69 persons. But final-hour buying, especially in the IT and Realty stocks, helped indices to erase losses to end flat. Traders took a note of Union Minister of State Kirti Vardhan Singh’s statement that the Digital India initiative has laid the foundation for a developed India by 2047. He said over the past 11 years, the government has brought about a digital revolution, inspiring citizens to work digitally, which has had an unprecedented impact on 1.4 billion people.   

On the global front, European markets were trading lower after data showed China's exports grew at a slower pace in November and imports unexpectedly shrank, in a worrying sign for the world's second-largest economy. Also, focus shifted to upcoming U.S. CPI data and the ECB policy meeting. Asian markets ended mostly higher on Tuesday, as markets in the region reacted positively to China's announcement of more proactive fiscal measures and a moderately looser monetary policy that bodes well for the nations flattering economy. 

Back home, on the sectoral front, there was some buzz in entertainment and media industry related stocks as a private report said that India’s entertainment and media industry is projected to grow at a combined annual growth rate (CAGR) of 8.3 per cent to hit Rs 365,000 Crore (USD 19.2 billion) outpacing the global rate of 4.6 per cent. Stocks related to auto sector were in watch as Federation of Automobile Dealers Associations (FADA) stated that retail sales of vehicles across categories in India grew by 11.21 per cent at 32,08,719 units in November 2024, as compared to 28,85,317 units in the same month last year riding on two-wheeler demand. 

Finally, the BSE Sensex rose 1.59 points to 81,510.05, and the CNX Nifty was down by 8.95 points or 0.04% to 24,610.05.        

The BSE Sensex touched high and low of 81,726.34 and 81,182.69 respectively. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 1.22%, IT up by 0.70%, Metal up by 0.41%, Basic Materials up by 0.36% and TECK up by 0.28%, while Telecom down by 1.18%, Utilities down by 0.93%, Power down by 0.59%, Capital Goods down by 0.35% and Oil & Gas down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.59%, HCL Technologies up by 1.31%, Infosys up by 1.22%, SBI up by 1.14% and Bajaj Finance up by 0.95%. On the flip side, Bharti Airtel down by 1.42%, Adani Ports &SEZ down by 1.39%, Tech Mahindra down by 0.90%, Reliance Industries down by 0.79% and Axis Bank down by 0.73% were the top losers.

Meanwhile, the Ministry of Labour & Employment in its latest release has showed that retail inflation for farm workers and rural labourers witnessed a notable decline in the month of October 2024, easing to 5.96% and 6%, respectively as compared to 7.08% and 6.92% in October 2023. This also represents a decrease from September's figures of 6.36% and 6.39%, respectively.

The recent release also noted that the All-India Consumer Price Index for Agricultural Labourers (CPI-AL) and Rural Labourers (CPI-RL) (Base: 1986-87=100) registered an increase of 11 points and 10 points in the months of October 2024, reaching levels of 1315 and 1326, respectively. The CPI-AL and CPI-RL were at 1,304 points and 1,316 points, respectively, in September 2024.

Meanwhile, breaching the Reserve Bank of India’s (RBI) upper tolerance level, India’s retail inflation based on Consumer Price Index (CPI) rose to a 14-month high of 6.21% in October 2024, as food inflation galloped on the back of rising vegetable prices. The RBI, which mainly factors in the CPI while arriving at its bi-monthly monetary policy, has been tasked by the government to ensure retail inflation remains at 4 percent with a margin of 2 percent on either side.

The CNX Nifty traded in a range of 24,677.80 and 24,510.65. There were 23 stocks advancing against 27 stocks declining on the index. 

The top gainers on Nifty were Shriram Finance up by 2.40%, Bajaj Finserv up by 1.65%, HCL Technologies up by 1.42%, Wipro up by 1.40% and Infosys up by 1.22%. On the flip side, Bharti Airtel down by 1.40%, Dr. Reddy's Lab down by 1.33%, Adani Ports &SEZ down by 1.17%, Adani Enterprises down by 1.14% and HDFC Life Insurance down by 1.09% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 50.69 points or 0.61% to 8,301.39 and France’s CAC fell 52.05 points or 0.7% to 7,428.09 and Germany’s DAX lost 36.43 points or 0.18% to 20,309.53.

Asian markets ended mostly higher on Tuesday ahead of key US inflation readings due this week that will help shape the outlook for Federal Reserve monetary policy. Chinese shares gained on announcement of more proactive fiscal measures and moderately looser monetary policy next year as part of efforts to boost domestic consumption. Meanwhile, disappointing readings on exports and imports also suggesting that China needs to do more to shore up a faltering economy that is only likely to face further challenges next year. Japanese shares rose as the yen weakened against its American counterpart for the second consecutive day. Seoul shares recovered after a fourth consecutive days of drops caused by political turmoil from President Yoon Suk Yeol's botched martial law declaration last week.