Nifty, Sensex end mild in green, Bank Nifty tops 44100, hits new record; traders eye US Fed for cues

Nifty, Sensex end mild in green, Bank Nifty tops 44100, hits new record; traders eye US Fed for cues

Domestic equity indices BSE Sensex and NSE Nifty end mildly in the green amid positive global cues. Sensex added over 100 points, settling at 62,677, while Nifty gained 0.28% to close at 18,660. Bank Nifty hit a fresh high intraday for the second consecutive session, tops the 44,100 level and ended 100 points higher. Nifty IT recouped some losses, ending over 1% higher. Traders await the outcome of the US Federal Open Market Committee (FOMC) meet. After four consecutive hikes of 75 basis points, the market is expecting Fed Chair Jerome Powell to moderate the pace of hikes to 50 bps amid early signs of moderation in inflation.

“Better-than-expected inflation readings from major global economies, combined with increased appetite for IT stocks, aided the domestic market’s bullishness. US CPI inflation easing to 7.1% in November will lower the chances of the Fed being hawkish. Though the Fed is largely expected to raise rates by 50 basis points, their comments on future inflation and rate actions would dominate market movements,” Vinod Nair, Head of Research, Geojit Financial Services.

Kunal Shah, Senior Technical Analyst, LKP Securities

“The Bank Nifty index continued its upward momentum and closed just above the critical hurdle of 44,000 where the highest open interest is built up on the call side. The index in order to continue the momentum on the upside must sustain above the 44,000 level to continue the rally towards 45,000 on the upside. After the spectacular rally in PSU banks now it’s time for the private banks to fire up and carry the momentum higher.”

Deepak Jasani, Head of Retail Research, HDFC Securities

Sharp fall in WPI inflation for November also helped sentiments. Broad market indices rose more than the Nifty even as the advance decline ratio was up at 1.35:1. Stocks rose Wednesday in Asia after a rally on Wall Street spurred by news that inflation in the U.S. cooled more than expected last month. European stocks opened lower as investors debated whether inflation had eased enough to encourage the Federal Reserve to slow monetary tightening.

India’s wholesale inflation fell to a 21-month low of 5.85% in November, a huge 470 basis points lower than what it was just two months ago. WPI inflation stood at 8.39% in October and 14.87% in November 2021. Nifty has formed a doji after a two day rise suggesting indecision ahead of the crucial US Fed meet which ends today. Outcome of the meet could decide the near term trend of the global markets including India. 18,696-18,729 band could offer resistance to the Nifty on the upmoves, while 18,410-18,490 band could offer support.