Indian equity benchmarks settled at fresh record closing highs on Tuesday amid massive buying in Utilities and Power sector shares. The rally was largely led by strong macroeconomic data and the Bharatiya Janata Party's (BJP) massive wins in the recent state elections. Key gauges made a positive start and remained in green for whole day, as provisional data from the National Stock Exchange showed that foreign institutional investors bought shares worth Rs 2,073.21 crore on December 4. Traders took encouragement with Minister of State for Finance Pankaj Chaudhary's statement that India will become a $5 trillion economy early in the Amrit Kaal on the path to achieve the goal of becoming an advanced economy by 2047. However, markets trimmed some gains in late morning deals, as traders got anxious with private survey showing that India's service sector activity expanded at its lowest pace in November. According to S&P Global, India's services Purchasing Managers' Index (PMI) in November fell to 56.9 as compared to 58.4 in October. This is the lowest figure in 2023 so far. Before this, services PMI was recorded at 57.2 in January. But markets regained traction in afternoon deals and settled around the day's high points, as sentiments got a boost with Finance Minister Nirmala Sitharaman's statement that the GST collection has been showing an upward trend on an annual basis since its rollout on July 1, 2017, and the average gross monthly mop-up in the current fiscal so far is Rs 1.66 lakh crore. She said the GST collection crossed Rs 1.50 lakh crore mark in every month of the current fiscal and had touched a record high of Rs 1.87 lakh crore in April 2023. Additional support also came with S&P Global Ratings' statement that India will become the world's third largest economy by 2030, as it forecast the nation's GDP growth reaching 7 per cent in 2026-27 fiscal year. It expects India will be the fastest growing major economy in the next three years. Some solace came on report that India and the UK have begun crunch-time talks to secure a landmark free-trade deal, as leaders on both sides seek to resolve outstanding issues before they face election battles next year. Finally, the BSE Sensex rose 431.02 points or 0.63% to 69,296.14 and the CNX Nifty was up by 168.30 points or 0.81% to 20,855.10.

The US markets ended mostly in red on Tuesday as traders continued to cash in on recent strength in the markets amid concerns optimism about the outlook for interest rates has led to overbought conditions. While the Federal Reserve is widely expected to leave interest rates unchanged in the coming months, traders need more evidence to solidify hopes of a rate cut in the near future. On the sectoral front, Oil service stocks came under pressure over the course of the session, dragging the Philadelphia Oil Service Index down by 2.3 percent to a five-month closing low. The weakness among oil service stocks came amid a decrease by the price of crude oil, with crude for January delivery falling $0.72 to $72.32 a barrel. A modest decrease by the price of gold also weighed on gold stocks, as reflected by the 1.9 percent loss posted by the NYSE Arca Gold Bugs Index. On the economic data front, a report released by the Labor Department showed a much bigger than expected decrease in U.S. job openings in the month of October. The report said job openings slid to 8.73 million in October from 9.35 million in September, falling to the lowest level since March 2021. Street had expected job openings to edge down to 9.30 million. Meanwhile, service sector activity in the U.S. grew at a slightly faster rate in the month of November, according to a report released by the Institute for Supply Management (ISM). The ISM said its services PMI crept up to 52.7 in November from 51.8 in October, with a reading above 50 indicating growth. Street had expected the index to inch up to 52.0.

Crude oil futures ended lower on Tuesday, magnifying recent session's losses amid lingering concerns about the outlook for energy demand, and on disappointment over the quantum of additional output cut announced by OPEC+. Further, a firm dollar weighed as well on oil prices. Also, investors looked ahead to the non-farm payroll data, due later in the week, for clues about the outlook for Fed's interest rate moves. Benchmark crude oil futures for January delivery fell $0.72 or about 1 percent to settle at $72.32 a barrel on the New York Mercantile Exchange. Brent crude for February delivery dropped $0.83 or about 1.06 percent to settle at $77.20 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against dollar on Tuesday amid positive sentiment in the equity markets and inflow of foreign funds. Sentiments were positive even after India's services sector witnessed deceleration in growth during the month of November, amid softer expansions in new work intakes and output, the slowest in a year. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index eased to 56.9 in November from 58.4 in October. On the global front, sterling hovered around its highest levels in almost three months against the euro on Tuesday, as markets raised their bets on rate cuts by the European Central Bank, which widened their divergence with the Bank of England. Finally, the rupee ended at 83.37 (Provisional), higher by 1 paisa from its previous close of 83.38 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 19527.84 crore against gross selling of Rs 14025.87 crore, while in the debt segment, the gross purchase was of Rs 3299.71 crore with gross sales of Rs 662.88 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.99 crore against gross selling of Rs 13.48 crore.

The US markets ended mostly lower on Tuesday amid fresh employment data bolstered bets that the U.S. Federal Reserve will cut interest rates as soon as March. Asian markets are trading mostly in green on Wednesday as bets firmed for a peak in interest rates among major central banks globally, as bond yields continued to decline. Indian markets ended at record highs for a second straight session on Tuesday as gains from hopes of political stability continued on the bourses. Today, markets likely to continue their gaining spree with optimistic start tracking gains in Asian counterparts coupled with fall in crude oil prices overnight. Foreign fund inflows likely to aid sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FIIs) bought shares worth Rs 5,223.51 crore on December 5. Some support will come with report that banks have written off Rs 10.57 lakh crore during the last five financial years, of which Rs 5.52 lakh crore was in respect of loans pertaining to large industries. The scheduled commercial banks have also recovered Rs 7.15 lakh crore of non-performing assets (NPAs) during the five-year period. Traders may take note of report that India and the UK have begun crunch-time talks to secure a landmark free-trade deal, as leaders on both sides seek to resolve outstanding issues before they face election battles next year. Besides, the finance ministry said that the Central government's debt is estimated to moderate to 57.2% of gross domestic product (GDP) in FY24 from 61.5% in FY21 when pandemic-related spending to provide succour to people and businesses led to a spike in its loan profile. However, some cautiousness may come with report that India's gross foreign direct investment (FDI) inflows dropped almost 16% in the first six months of FY24 from a year before to $33.12 billion, the second straight fall in the first half of a fiscal. The minister of state for finance Pankaj Chaudhary said the inflow have been impacted by the threat of global recession, economic crisis due to the Russia-Ukraine conflict, global protectionist measures and decline of real GDP growth rates of Singapore, USA and UK which are the major source countries for FDI. Select telecom stocks will be in focus with a private report that the Telecom Regulatory Authority of India (Trai) has asked Reliance Jio and Bharti Airtel to provide clear terms and conditions for their unlimited 5G data offerings. There will be some reaction online gaming industry related stocks after the finance ministry said as many as 71 show cause notices have been issued to online gaming companies for alleged GST evasion of over Rs 1.12 lakh crore during financial years 2022-23 and 2023-24.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Tata Motors has launched the all-new Intra V70, Intra V20 Gold and Ace HT+, in line with its commitment to make first and last mile transportation more efficient.
• Eicher Motors' motorcycle arm -- Royal Enfield has forayed into the pre-owned bike segment.
• State Bank of India has received final approval from ECCB to acquire 20% stake in SBI Pension Funds from SBI Capital Markets.
• Power Grid Corporation of India has been declared as successful bidder under TBCB to establish Inter-State Transmission System Project.