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Informist, Thursday, Dec. 12, 2024

By Anjana Therese Antony

MUMBAI – The Indian market is likely to see a muted session Friday in the absence of major triggers, with bias expected to remain bearish for a couple more days, technical and derivatives analysts at two broking firms said. As a result, indices may snap a three-week gaining run and end lower. "Indices have been moving in a small range this week as there was not any major event that could move the market sharply," one of the analysts said. However, the medium-term approach remains bullish, as investors are betting on a pickup in the government as well as the private capital expenditure cycle.

On Thursday, the Nifty 50 closed 0.4% lower at 24548.70 points and the BSE Sensex ended 0.3% lower at 81289.96 points. The near-term support for the 50-stock index is pegged at 24500-24480 points and resistance at 24600-24650 points, according to two technical and derivatives analysts. Most sectoral indices closed in the red, barring Nifty IT and Nifty Metal.

India's consumer inflation eased to 5.48% in November from a 14-month high of 6.21% in October, as per data from the National Statistical Office released Thursday. "The November CPI inflation came broadly in line with expectations...We expect inflation to slowly inch towards the Reserve Bank of India's medium-term target of 4% by mid-2025, providing room for monetary easing from the February policy," Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, said in a note. Last week, the RBI retained the repo rate at 6.50% for the 11th straight time and maintained its 'neutral' stance.

The focus is expected to shift to the outcome of the US Federal Reserve's monetary policy decision next week. The latest US inflation data, which did not come with any negative surprises, has increased the possibility of a 25-basis-point reduction in federal fund rates to 4.25-4.50%. In September, the US Fed had surprised global investors with a 50-bps cut in rates and further reduced it by 25 bps in November.

When it comes to valuations in India, experts said they are expensive across sectors, except for certain private sector banks and insurance companies. Banks and financial services stocks were among the major laggards Thursday. These stocks had risen last week after the RBI reduced the cash reserve ratio in an attempt to boost liquidity. The Nifty PSU Bank closed 0.8% lower Thursday, down for the second consecutive session.

Among specific stocks, GR Infraprojects could be in focus as the company said it has got a letter of intent from PFC Consulting to set up a transmission scheme to integrate the Bijapur Renewable Energy Zone in Karnataka. The quoted transmission cost for the project is INR 1.08 billion per annum. The stock closed 1.1% lower at INR 1,593.90 on the National Stock Exchange. 

With respect to initial public offerings, Vishal Mega Mart's issue will close for subscription on Friday. The public offer is solely an offer for sale of shares worth up to INR 80 billion by promoter Samayat Services.  End

Edited by Ashish Shirke

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