Indian equity benchmarks continued to exhibit a muted trend as of afternoon trade on December 12 despite hovering near their record high levels. Investors chose to take home partial profits following the bull run in recent weeks, keeping momentum subdued in today's session.
With most of the positive news - be it steady interest rates or state election results starting to get priced-in, analysts believe the inflation print and the US Federal Reserve's policy outcome, due for a release late December 13, will drive the next course of equity action.
"The fundamental factor supporting the rally which had taken the market to record highs were the series of positive news: Q3 GDP growth rate of 7.6 percent, brent crude declining to $76 a barrel, FPIs turning buyers, and retreating bond yields," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Since these positive developments are mostly in the price, the market waiting for incoming crucial data before making further moves. Therefore, the market will be keenly watching the inflation print from the US due later today and the Fed’s message on December 13," he added.
Technically, analysts believe that bullish undertone of overall markets continues to remain intact and traders should approach equities with 'buy-on-dips' trading strategy and stay focused on stock selection.
"We are seeing consolidation in Nifty with a positive bias and it has formed an immediate support base around the 20,700-20,800 zone. We feel positive cues from the US markets could trigger the next leg of the up move so keep a close watch on their performance," added Ajit Mishra, SVP - Technical Research, Religare Broking.
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Around noon, the Sensex was down 11.19 points or 0.02 percent at 69,917.34, and the Nifty was up 9.70 points or 0.05 percent at 21,006.80.
However, the market breadth still remained in favour of gainers as about 1,762 shares rose, 1,405 fell while 77 were unchanged.
The broader markets, however, outperformed frontline indices as the Nifty Smallcap 100 was up 0.7 percent and the Nifty Midcap 100 was up 0.2 percent.
Later in the day, all eyes will be on India's consumer price index (CPI)-based retail inflation figures. According to Reuters poll, India's retail inflation may pick up in November to 5.7 percent, faster than 4.87 percent recorded in October.
The US, too, will release its retail inflation print for November. Experts expect rise 3.1 percent in November, at a slightly softer pace than the 3.2 percent increase recorded in October.
Stocks and sectors
Among individual stocks, shares of Infosys were trading nearly 1 percent lower on December 12 after the company's chief financial officer, Nilanjan Roy stepped down from his post to pursue personal aspirations. Global brokerage firm Morgan Stanley warned that this news could weigh on the sentiment for the stock as the resignation was not expected.
Shares of Mankind Pharma was down 4 percent in December 12 morning trade after around 8.7 percent equity or 3.5 crore shares of the drugmaker changed hands in a block deal.
Moneycontrol had reported citing multiple sources that three private equity firms, namely, Chrys Capital, Capital Group and Everbridge Partners, were looking to pare stake in the drugmaker worth at least $592 million through the block deal route.
That apart, Hindalco Industries rose over 3 percent to hit a 52-week high after the company announced plans to invest Rs 800 crore to set up a battery foil manufacturing unit in Odisha to tap into the fast growing EV market.
Among other gainers, shares of L&T Technology Services gained 1 percent after the company signed multi-year engineering services pact with BP (British Petroleum), one of world's largest diversified energy companies.
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