Market Wrap: Sensex, Nifty extend gains into second consecutive session; FOMC outcome in focus

Frontline indices the Sensex and the Nifty ended higher, extending gains into the second consecutive session, on December 14 ahead of the US FOMC outcome.

After data showed that US consumer prices rose marginally in November, hopes are high that the pace of rate hikes will slow and subsequently stop in 2023. Nevertheless, the US Fed is expected to lift rates by 50 bps later on December 14.

Domestic macro print also boosted sentiment. As Mint reported earlier quoting official data, India’s annual wholesale price index (WPI) inflation fell to its lowest in 21 months in November, driven by easing prices of food, fuel and manufactured items. The WPI for November was 5.85 percent year-on-year. This was the second consecutive month when WPI stayed below the double-digit mark.

Key highlights of the day

On expected lines, Sensex opened 153 points higher at 62,685.94, tracking gains in its US and major Asian peers, and rose 302 points to hit the intraday high of 62,835.11.

It lost some gains later and closed at 62,677.91, up 145 points, or 0.23 percent while the Nifty closed with a gain of 52 points, or 0.28 percent, at 18,660.30.

Mid and smallcaps outperformed as the BSE Midcap index rose 0.59 percent while the Smallcap index clocked a gain of 0.68 percent.

The cumulative market capitalisation of BSE-listed firms rose to ₹291.2 lakh crore from ₹290 lakh crore in the previous session, making investors richer by ₹1.2 lakh crore in a single day.

As many as 179 stocks, including Axis Bank, Larsen & Toubro, SBI, Bharat Forge and Indian Bank, hit their 52-week highs in intraday trade on BSE.

Top Sensex gainers and losers

Shares of Tech Mahindra, Tata Steel, NTPC, SBI and IndusInd Bank ended as the top gainers in the Sensex index, rising over a percent each.

On the flip side, Nestle, ICICI Bank, Bharti Airtel, Asian Paints and Hindustan Unilever ended as the top laggard stocks in the Sensex kitty.

Sectoral picture

Barring Nifty FMCG (down 0.43 percent), all sectoral indices ended higher, with Realty (up 1.45 percent), Metal (up 1.25 percent), IT (up 1.15 percent) and Media (up 1.05 percent) rising over a percent each.

Nifty Consumer Durables rose 0.90 percent and Nifty Bank clocked a gain of 0.23 percent.

Experts take

"Better-than-expected inflation readings from major global economies, combined with an increased appetite for IT stocks, aided the domestic market's bullishness. US CPI inflation easing to 7.1 percent 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," said Vinod Nair, Head of Research at Geojit Financial Services.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said: "There was caution among the investors ahead of the US FOMC meet outcome and traders kept a low profile by taking selective bets in metal and realty stocks."

Technical views

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas observed that despite multiple attempts, Nifty couldn’t build upon the early gains.

"Fibonacci retracement shows that the index has done deep retracement of the entire recent decline and has reached the 61.8 percent retracement mark. Nifty formed a distribution throughout the day near the key Fibonacci level and moved lower towards the end of the session. The overall structure shows that the index is still in a short-term consolidation phase and can trade around 18,700-18,300 over the next few sessions," said Ratnaparkhi.

Key market data

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.