After hitting new highs, benchmark indices turned volatile by the afternoon session and closed muted on Wednesday, amid mixed global equities. Erasing early gains, Sensex ended 24 points lower at 49,494 and Nifty closed 1 point higher at 14,564. In today's session, Sensex and Nifty hit fresh lifetime highs of 49,795 and 14,653, respectively. Yesterday, Sensex ended 247 points higher at 49,517 and Nifty gained 78 points to 14,563.
On Sensex, Titan, Kotak Bank, Dr Reddy's, TCS and HCL Tech were among the laggards. On the other hand, Bharti Airtel, ONGC, SBI, ICICI Bank, M&M, NTPC, L&T and Axis Bank were among the top gainers. Except for pharma, realty and financial services, all other indices on NSE closed in green territory, with over 3% gain registered in PSU banking sector.
In the currency market, the domestic currency gained for the second straight day and closed 10 paise higher at 73.15, supported by weakness in the greenback overseas, continued FPI inflows and recovery in other Asian currencies.
On the macro front, the Index of Industrial Production (IIP) contracted 1.9% for November 2020, data released on Tuesday showed. The factory output in the country had grown at 3.6% in October. India's Consumer Price Index (CPI) eased to 4.59% in December from 6.93% in November.
Deepthi Mathew, Economist at Geojit Financial Services said,"After eight months, the inflation rate has fallen back to the permissible range. The decline is mainly contributed by the fall in food prices, especially vegetables. Vegetable price registered a negative growth rate of 10.4 per cent YoY in December'20. Though the fall in inflation was a relief, contraction in IIP is a cause of concern. It shows the weak demand in the economy. The manufacturing sector contracted by 1.68 per cent in November'20, compared to a growth of 4.12 per cent in October'20. Festive demand aided the positive growth in October."
Globally, markets were trading mixed as investors look for details on coronavirus front. As per reports, the Japanese government is set to expand state of emergency to more areas. That comes after Japanese Prime Minister Yoshihide Suga recently declared a state of emergency in Tokyo and three other areas in a bid to stem a rise in coronavirus infections. Media reports also suggested restrictions by Chinese authorities in regions near Beijing following a rise in new coronavirus cases.
US markets closed slightly higher as weakness in tech stock blocked big gains. Just days ahead of President-elect Joe Biden's tenure on January 20, investors watched for developments from Washington, with the U.S. House set to push ahead with efforts to remove President Donald Trump from office over his role in sparking last week's deadly attack on the Capitol.
European markets closed on a mixed note as investors remained concerned over spike in coronavirus cases and political developments in the US.
S Ranganathan, Head of Research at LKP Securities said, "A volatile day indeed with Indices swinging both ways ahead of earnings today from the two IT biggies. The highlight of the day was a spirited upmove put up by the state-owned banks in afternoon trade."
Ashis Bisas, Head of Technical Research at CapitalVia Global Research said,"Today, the market failed to show resilience to stay above the level of 14600 and we saw profit booking in the market. As of now, the short-term technical condition of the market shows that the expected range of the market is likely to be between 14380 and 14680. While it is subject to further price action evolution, our research suggests it is prudent to wait for a decisive breakout above 14680 and technical factors to improve before going long in the market. As such we retain our cautious stance and advise the traders to refrain from building a fresh buying position, until we see further improvement and breakout above 14680."
Sahaj Agrawal, Head of Research- Derivative at Kotak Securities said,"Nifty has achieved a long range target of 14640 and is now expected to witness increased volatility going ahead. For Traders, 15100 can be expected on the higher side with momentum support seen at 14280. Aggressive buying is advisable below the 14000 mark. Banking and Energy stocks are expected to outperform in the near term."
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