Sensex and Nifty flatline

The Indian stock market witnessed a subdued session today, with the Sensex and Nifty ending nearly flat as investors exercised caution ahead of crucial US and India CPI inflation figures due later this week. While the benchmark indices traded in a narrow range, the broader market displayed resilience, with midcap and smallcap indices posting gains. The IT sector emerged as the star performer, hitting record highs on positive sentiment and favorable global cues.

Market performance:

The Sensex closed marginally higher by 1.6 points at 81,510, while the Nifty edged down by 9 points, or 0.04%, to settle at 24,610. Trading activity was relatively balanced, with 1,969 shares advancing and 1,828 shares declining.

Sectoral highlights:

• IT Sector Soars: The IT index stole the show, surging nearly a percent to reach a record high of 45,377.75. This impressive performance was fueled by strong gains in Infosys and LTIMindtree, both of which were upgraded to 'Buy' by HSBC.² The IT sector's positive momentum is attributed to favorable global market conditions and the rupee's weakness against the US dollar.
• Energy and Oil & Gas decline: In contrast, the energy and oil & gas sectors faced headwinds, with the Nifty Energy and Nifty Oil & Gas indices declining 0.6% and 0.3%, respectively. Reliance Industries and ONGC were among the major draggers in this sector.
• Mixed performance in other sectors: Banking, consumer durables, and realty sectors posted modest gains, while healthcare and pharma stocks experienced some selling pressure.

Key Market Movers:

• Infosys and LTIMindtree: These IT giants led the market rally, with their shares rising by 1% and 3%, respectively, following HSBC's positive outlook and 'Buy' rating.
• Reliance Industries: Shares of Reliance Industries, a heavyweight in the Nifty 50, declined after J.P.³ Morgan highlighted potential risks to its FY25 earnings growth.
• Greaves Cotton: The company's shares surged 18.5% after ace investor Vijay Kedia acquired a 0.52% stake through a block deal.⁴
• Life Insurance Corp of India: LIC shares fell nearly 4% after reporting a 27% year-on-year decline in total premium collections for November.⁵

Market outlook:

Analysts suggest that the Nifty is likely to remain in a consolidation phase between 24,400 and 24,800 in the near term. The upcoming US and India CPI inflation data could act as potential catalysts for market movement. A breakout above 24,700 could trigger positive momentum, while a fall below 24,400 could signal further weakness.

The Indian stock market's muted performance reflects a cautious approach by investors as they await key economic data and assess the impact of recent developments, including the new RBI Governor's appointment and China's policy announcements. While the IT sector's strong performance offers a bright spot, concerns about specific sectors and global economic uncertainties continue to influence market sentiment. The upcoming inflation data and central bank decisions will likely play a crucial role in shaping market direction in the coming days.

DISCLIMER: Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.