Markets get inflation booster, end strong

The Indian markets rose for the third consecutive day and shut on a strong note as investor sentiment remained upbeat after the fall in monthly inflation

Major headlines

Inflation inches down to 7.48% in November

NTPC signs PPA with Bengal government; the stock closes 1.12% higher

Sterlite Industries gains as Supreme Court extends stay over High Court order; the stock ends higher by 3.46%



Indian indices

The Indian markets extended rising trend for the third straight day and closed volatile session on a positive note. The Nifty is now slowly inching towards 6000 mark. Today’s rally was boosted by decline in November inflation numbers, which came in at 7.48% as compared to 8.48% seen in October. The investor sentiment remained upbeat as the fall in inflation could prompt the Reserve Bank of India to take a pause in its monetary policy review after hiking the key policy rates six times this year to check rising price

The broader markets continued to outperform the Sensex. Heavy buying in consumer durables, metal and realty stocks led the markets to rise.

In the largecap space, Sterlite Industries was the top gainer, up over 3%. Tata Motors, Tata Steel, Cairn India and Reliance Infrastructure were up in the range of 2-2.8%. Hero Honda, Jindal Steel, Mahindra and Mahindra, Axis Bank and Hindustan Unilever were down by 1-3%. Top gainers on the BSE Midcap: Prakash Industries, Financial Technologies, Deccan Chronicle, Gujarat State Fertilizers and Hindustan Construction Company were up by 6-11%. Top losers on the BSE Midcap: Money Matters Financial, KGN Industries, Gujarat NRE Coke, Shree Global and Hindustan Natural Glass were down by 2-5%.

The Sensex began the session 55 points higher at 19747 tracking supportive Asian markets. However, the index slipped erasing initial gains and hit the day’s low of 19621 in early trade. From the day’s low, the index started to trim losses and turned positive as the session progressed. The decline in the monthly inflation provided much needed supported, which lifted the Sensex higher. The Sensex continued to trade strong, hitting the day’s high of 19837 in the late trade.

Finally, the Sensex closed the session at 19799, rising 107 points and the Nifty ended 36 points higher, at 5944.

Bond update: India’s 12-year bonds gained before the central bank purchases debt from the market this week. The yield on the 8.13% bond due in September 2022 fell six basis points to 8.07%.

Market sentiment

The market breadth was in favour of advances; the gainers outpaced the losers over two times. Of the 2,991 stocks traded on the BSE, 1,931 rose while 939 fell. Hundred and twenty-one stocks traded unchanged.

Sectoral & stock screening

All the 13 sectoral indices ended in the positive territory except BSE Auto that closed marginally lower by 0.20%. BSE Consumer Durables (CD) was the top performer, rose by 3.14%, BSE Metal gained by 1.60% and BSE PSU advanced by 0.97%. Rest of the sectors ended higher in the range of 0.31-0.95%.

Looking into ‘A' group stocks, top three gainers - Financial Technology rose by 7.59%, Shriram Transport Finance up by 7.5% and Hindustan Oil Exploration gained by 6.53%. Top three losers - Hero Honda Motors slid by 3.30%, Nestle India down by 2.11% and Adani Enterprises declined by 1.89%.

Viewing volumes

Construction firm - Hindustan Construction Company was the most traded stock, with over 0.57 crore shares changing hands on the BSE, followed by industrial finance company - IFCI (0.45 crore shares), India’s second largest developer - Unitech (0.31 crore shares), wind turbine major - Suzlon Energy (0.24 crore shares) and government fertilizers firm - Rashtriya Chemicals & Fertlizers (0.18 crore shares).

Global signals

The European shares slipped after making their longest winning streak in five months as investors await the US Federal Reserve Open Market Committee announcement for more signs about the economy.

The major Asian indices closed in the positive territory except Jakarta Composite and Straits Times.

The US stock index futures point to a flat opening on the Wall Street ahead of the key federal reserve meeting.

Market Outlook: Tonight in the US, the Federal Reserve will make a rate decision but nothing is expected to change. Also, retail sales numbers will be out for the month of November along with Producer Price Index (PPI) and Business Inventories.