Among the key macro data, India’s consumer price index (CPI)-based inflation, or retail inflation, for November was declared in the late evening on Tuesday.
India experienced a notable acceleration in consumer price index (CPI)-based inflation, reaching 5.5%, marking the swiftest increase in three months. This surge was primarily attributed to a notable uptick in food prices, as reported by the Statistics Ministry. With this development, November’s retail inflation is approaching the upper limit of the Reserve Bank of India’s tolerance band, set at 6 percent.
Meanwhile, the industrial production growth increased to a 16-month high of 11.7% in October, on growth in manufacturing, mining and electricity sectors. In August, the Index of Industrial Production (IIP) increased by 10.3%, showed the National Statistical Office data.
Internationally, investors are eagerly anticipating the release of the US Consumer Price Index (CPI) for November, as it will provide insights into the potential next steps of the US Federal Reserve regarding monetary policy. The two-day monetary policy meeting of the United States Federal Reserve commenced yesterday, with Fed Chair Jerome Powell set to announce the central bank’s rate decision today, Wednesday, December 13.
“Following the recent impressive surge, the Nifty50 has undergone a consolidation phase today due to anticipated elevated November inflation in India, driven by rising food prices, which may potentially delay RBI policy cuts. In contrast, the US inflation outlook remains stable, which could influence the upcoming US Fed policy. The Nifty Mid and Small indices, with robust rallies of 42% and 49% on a YTD basis, now carry a 25% premium to their long-term averages, signalling potential valuation concerns. Though the domestic growth outlook remains strong, the risk of EL-Nino is expected to keep the market under pressure,” said Vinod Nair, Head of Research at Geojit Financial Services.
After the RBI’s status quo on policy rate and stance, the US Fed is also expected to keep interest rates steady in the current 5.25-5.50 per cent range.
Sensex ended at 69,551.03, experiencing a decline of 378 points, equivalent to 0.54 percent. Although the BSE Midcap and Smallcap indices achieved new peak levels of 35,761.19 and 41,660.43 respectively during the day, they ultimately closed in negative territory. The BSE Midcap index recorded a 0.40 percent loss, while the Smallcap index ended the day with a 0.27 percent decrease.
Here’s what to expect from Nifty 50 and Bank Nifty today —
Nifty 50 Predictions
Nifty 50 touched its fresh record high of 21,037.90 during the session but failed to hold gains and ended 91 points, or 0.43 per cent, down at 20,906.40, yesterday.
“The Nifty has formed a bearish engulfing pattern on the daily chart, suggesting a possibility of a bearish reversal. On the higher end call writers have built a heavy position at 21000. On the lower end, put writers are heavily present at 20,800 and 20,900. Therefore, the Nifty is likely to remain mostly sideways to negative as long as it remains below 21000. Only a decisive move above 21,000 might induce a resumption of the uptrend. Support is placed at 20,800, below which the index may consolidate further,” said Rupak De, Senior Technical analyst at LKP Securities.
Bank Nifty Predictions
On December 12, Nifty Bank ended with a loss of 0.46 percent while the Nifty Auto index fell 0.70 percent.
“The Bank Nifty index encountered resistance at higher levels, facing selling pressure and struggling to breach the 47500 mark. The lower-end support for the index is positioned at 46800, and a decisive break below this level could trigger additional downside movement toward the 46400 levels. With weekly expiry approaching, heightened volatility is anticipated. Traders are advised to exercise caution and implement strict stop-loss measures on both sides of the market,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 13 Dec 2023, 06:09 AM IST