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Sensex, Nifty open flat as investors eye US inflation data; auto stocks accelerate

For two consecutive sessions, Indian benchmarks have been in a consolidation phase as traders exercise restraint, waiting for clarity on inflation trends.

December 11, 2024 / 10:08 IST
The broader market continued to outperform the benchmarks, with the BSE Midcap index rising 0.2 percent and the BSE Smallcap index gaining 0.4 percent.
     
     
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    The Sensex and Nifty opened flat on December 11 as investors remained cautious ahead of key inflation data from the U.S. later in the day and the domestic CPI print on December 12, expected to provide cues on the rate trajectories for both economies. The auto index climbed higher, while banking stocks faced mild selling pressure.

    At 9:30 AM, the Sensex was down 2.6 points at 81,507 and the Nifty was up 11 points or 0.05 percent at 24,621. About 2,098 shares advanced, 839 shares declined, and 115 shares remained unchanged.

    For two consecutive sessions, Indian benchmarks have been in a consolidation phase as traders exercise restraint, waiting for clarity on inflation trends. Three analysts told Moneycontrol that they expect this cautious tone to persist until the data is released.

    "Nifty is in a consolidation range and is likely to remain in this consolidation phase with a mild upward bias in the near-term," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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    The return of FIIs to India is being viewed as a significant positive for the domestic market. In December so far, FIIs have made net purchases of nearly Rs 14,000 crore, after their selling spree in October and November.

    "FIIs initially played the China trade for quick gains but soon realised the underlying weaknesses in the economy," said Sandip Agarwal, Fund Manager and Co-founder of Sowilo Investment Managers LLP. "They are now returning to India. I don't expect significant selling from FIIs going forward. This December could turn out to be one of the best in 5–10 years, particularly for midcap and smallcap performance."

    A few days back, Beijing announced plans to adopt "moderately loose monetary policies" next year and introduce steps to boost consumption, marking its first such policy shift in 14 years.

    "China will attempt to revive its ailing economy through monetary easing, but this will likely be short-lived," Agarwal said. "The structural issue is that China's advantages of scaling production and low labour costs are no longer compelling and people want 'China plus one' strategy."

    Also Read | SIP stoppage ratio climbs to third-highest level ever in November

    In sectoral performance, Nifty Auto rose half a percent, driven by gains in M&M, Maruti Suzuki, and Tata Motors, after Jefferies identified M&M as a top pick.

    Cement stocks gained amid price hikes by dealers, marking the first increase after 4–5 months of stagnant margins. The hikes are attributed to rising demand from the real estate sector, improved post-festive labor availability, and higher infrastructure orders. Shares of ACC, Dalmia Bharat, JK Cement, and JK Lakshmi Cement rose between 1–3 percent.

    Coming to individual stocks, Avenue Supermarts shares dropped 2 percent after Goldman Sachs slashed its target price to Rs 3,425 per share from Rs 4,000, citing mounting competitive pressures on its market position.

    Swiggy shares dropped over 4 percent, weighed down by the end of the anchor lock-in period and growing concerns over competition from Amazon Tez.

    The broader market continued to outperform the benchmarks, with the BSE Midcap index rising 0.2 percent and the BSE Smallcap index gaining 0.4 percent.

    Also Read | ADB trims developing Asia's growth forecast, cuts India's GDP projection

    Highlighting the outperformance of the midcap and smallcap space, Karthick Jonagadla, Founder and CEO of Quantace Research, said that midcap, smallcap, and microcap indices are closer to their all-time highs than large-cap indices. "This indicates that retail investors are increasingly chasing high-risk opportunities in under-researched segments, driven by the prospect of outsised returns. This trend underscores changing investor behaviour, with a greater willingness to explore growth-oriented investments outside the traditional large-cap space."

    However, Jonagadla warned that the high valuations in these segments could amplify risks if the market turns volatile.

    From a technical perspective, Shrikant Chouhan, Head of Equity Research at Kotak Securities, advised traders to watch the 24,500–24,700 range closely. He said that a breakout above 24,700 could propel the market toward 24,800, while a dip below 24,500 could intensify selling pressure.

    UltraTech Cement, Britannia, Nestle, Tata Consumer Products, and Grasim led the gains on Nifty 50, climbing 1.4–2 percent. Meanwhile, HCLTech, Bajaj Finserv, ICICI Bank, Wipro, and Trent were among the top laggards, each declining over 0.5 percent.

    Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

    Neeshita Beura
    first published: Dec 11, 2024 09:40 am

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