Sensex, Nifty remain rangebound for 4th straight day ahead of US inflation data; IT, auto stocks gain

Railway stocks saw a strong surge as several companies continued their recovery from the lows reached in November. Shares of BEML, IRCON International, IRFC, and Rail Vikas gained between 2-5 percent.

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The Sensex and Nifty remained rangebound for the fourth consecutive session and ended largely unchanged on December 11, with investors awaiting key inflation data from the US later in the day and India's CPI print on December 12. These data points are expected to offer guidance on future rate trajectories for both economies. While IT, auto, and FMCG stocks gained, energy lagged behind.

At close, the Sensex was up 16 points or 0.02 percent at 81,526, and the Nifty was up 32 points or 0.1 percent at 24,642. About 2,053 shares advanced, 1,772 shares declined, and 109 shares remained unchanged.

This cautious market sentiment is expected to persist until the release of inflation data, ahead of the Federal Open Market Committee's meeting on December 17-18.

"If the (inflation) data turns out positive and cools down, we could see a 25 basis point rate cut by the US Federal Reserve in its upcoming meeting. In that case, Nifty will likely surpass the 25,000 mark, potentially hitting 25,200," Ashish Bahety, Director of NAV Investment, told Moneycontrol. "Conversely, if there is no rate cut or if the data is negative—though this seems unlikely—Nifty could correct and possibly touch the 20-day moving average at 24,200."

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Regarding the rangebound movement of the benchmarks, Bahety said, "Following extreme reactions post-election—first on the upside, then sharply down—the index is now attempting to establish a base, filling gaps created earlier this year. Meanwhile, mid-cap and small-cap stocks have outperformed over the past two weeks, mainly driven by domestic mutual fund liquidity."

On the sectoral front, IT, auto, and FMCG stocks led the gains on Nifty.

The IT index gained 0.3 percent led by gains in Infosys and LTIMindtree. Infosys shares gained nearly 1 percent after joint venture, Infosys Compaz, strengthened its collaboration with Singapore-based StarHub.

Nifty Auto index rose 0.4 percent, driven by strong performances from Maruti Suzuki, Hero MotoCorp, and M&M after Jefferies singled out M&M as a top pick in the sector.

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Nifty FMCG index rose 0.4 percent led by gains in Britannia, Marico, and Nestle.

Cement stocks also gained attention as dealers raised prices—marking the first increase in 4-5 months. The hikes were attributed to rising demand from the real estate sector, improved labor availability post-festive season, and higher infrastructure orders. Shares of ACC, Ambuja Cement, Birla Corp, Dalmia Bharat, JK Cement, JK Lakshmi Cement, and Star Cement rose between 0.5–4 percent.

Railway stocks saw a strong surge as several companies continued their recovery from the lows reached in November. Shares of BEML, IRCON International, IRFC, and Rail Vikas gained between 2-5 percent.

The Nifty Metal ended flat but had gained significant attention intraday by rising over 1 percent amid expectations of monetary easing by China, the world's largest consumer of metal. Beijing recently announced plans to implement "moderately loose monetary policies" next year, signaling its first such policy shift in 14 years.

Market experts view this development in China as relatively non-concerning. Sandip Agarwal, Fund Manager and Co-founder of Sowilo Investment Managers LLP said that China will attempt to revive its economy through monetary easing every few months, but the optimism surrounding this will be short-lived. "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."

Agarwal said that Foreign Institutional Investors (FIIs) had leveraged the China trade for short-term gains but returned to Indian markets after realising the underlying weaknesses in the Chinese economy. So far in December, FIIs have made net purchases of nearly Rs 14,000 crore, after a period of heavy selling in October and November.

Also Read | Gold ETFs see nearly 4x surge in inflows amid strong investor demand and global uncertainty

Amongst individual stocks, DEE Development Engineers shares rose 2 percent after securing a $16.5 million purchase order from an international client. Greaves Cotton shares rose nearly 2 percent after the company unveiled electrified light construction equipment at Bauma CONEXPO India 2024. VIP Clothing shares rose over 3 percent after the company partnered with Swiggy Instamart for 10-minute delivery of its men's innerwear brand, Frenchie.

Avenue Supermarts shares dropped 3 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 3 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 0.3 percent and the BSE Smallcap index gaining 0.4 percent.

Bajaj Finance, Britannia, Shriram Finance, Trent, and Bajaj Finserv led the gains on the Nifty 50 index, rising between 1.4-2.7 percent, while Adani Ports, JSW Steel, NTPC, SBI, and Axis Bank were the top losers, declining 0.6–1.3 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.