Indian equity markets, after swinging between the red and green zones, ended flat with negative bias on Wednesday as investors turned cautious as the focus shifts to key December inflation data to be announced on Thursday. For the most part of the session, the benchmark indices kept treading around the neutral lines, as traders were concerned as the World Bank slashed its 2023 growth forecasts to levels teetering on the brink of recession for many countries as the impact of central bank rate hikes intensifies, Russia's war in Ukraine continues, and the world's major economic engines sputter. It expected global GDP growth of 1.7% in 2023, the slowest pace outside the 2009 and 2020 recessions since 1993. In its previous Global Economic Prospects report in June 2022, the bank had forecast 2023 global growth at 3.0%. Some cautiousness also came in the markets as a private report stated that private equity investments into domestic companies fell sharply year-on-year by 42 per cent to $23.3 billion in 2022, which is the lowest since 2019, when it was $15.8 billion. The numbers reflect the overall funding winter that the startup space in particular, and the overall foreign investments in general have been witnessing since the Ukraine war began last February. However, losses were limited as traders took some support with Ministry of Commerce and Industry joint secretary M Balaji's statement that the Economic Cooperation and Trade Agreement (ECTA) signed between India and Australia would provide immediate market access at zero duty accounting 96.4 per cent of India's exports in value terms to Australia.  He said the ECTA has the potential to double bilateral ties between the two countries to $50 billion over the next five years. Traders also took a note of private report that the central government is likely to further consolidate its fiscal deficit by 50 basis points (bps) to 5.9 per cent in FY24 from 6.4 per cent in FY23. Meanwhile, the Reserve Bank of India (RBI) in its latest report has showed that India Inc raised $5.20 billion via external commercial borrowings (ECBs) during November 2022 as against $1.43 billion in October 2022, higher by 3.63 times. Finally, the BSE Sensex fell 9.98 points or 0.02% to 60,105.50 and the CNX Nifty was down by 18.45 points or 0.10% to 17,895.70.

The US markets ended higher on Wednesday, magnifying their previous session' gains, as investors were optimistic ahead of an inflation report that could give the Federal Reserve room to dial back on its aggressive interest rate hikes. The much-anticipated report due on Thursday is projected by street to show U.S. consumer prices grew 6.5% year-on-year in December, moderating from a 7.1% rise in November. Meanwhile, traders also looked to continue picking up stocks at relatively reduced levels following the considerable weakness seen last year. Tech stocks have seen a notable benefit from bargain hunting, with the Nasdaq closing higher for the fourth consecutive session. On the sectoral front, interest rate-sensitive commercial real estate stocks moved sharply higher on the day, with the Dow Jones U.S. Real Estate Index soaring by 3.5 percent to its best closing level in well over three months. Substantial strength was also visible among housing stocks, as reflected by the 2.6 percent spike by the Philadelphia Housing Sector Index. The index surged to a nine-month closing high. Retail stocks also turned in a strong performance, resulting in a 2.5 percent jump by the Dow Jones U.S. Retail Index. Software, chemical and transportation stocks also saw considerable strength, moving higher along with most of the other major sectors.

Crude oil futures ended sharply higher on Wednesday on hopes about global economic recovery and the possible impact of sanctions on Russian crude output. Oil prices rose despite data showing an unexpected increase in US crude inventories in the week ended January 6, 2023. Data released by US Energy Information Administration (EIA) showed crude inventories in the US increased by nearly 19 million barrels last week, about 11 times more than the previous week, and against expectations of a drop in stockpiles. Meanwhile, gasoline stockpiles rose by 4.114 million barrels last week, more than two times the expected increase, while distillate stockpiles dropped by 1.069 million barrels, about 2.1 times the expected decline. Benchmark crude oil futures for February delivery rose $2.29 or 3.1 percent at $77.41 a barrel on the New York Mercantile Exchange. Brent crude for March delivery surged $2.82 or 3.52 percent at $82.92 a barrel (provisional) on London's Intercontinental Exchange.

Indian rupee strengthened against the dollar for third consecutive day driven by overall weakness in crude oil prices. Sentiments remained upbeat even after World Bank slashed its 2023 growth forecasts to levels teetering on the brink of recession for many countries as the impact of central bank rate hikes intensifies, Russia's war in Ukraine continues, and the world's major economic engines sputter. It expected global GDP growth of 1.7% in 2023, the slowest pace outside the 2009 and 2020 recessions since 1993. In its previous Global Economic Prospects report in June 2022, the bank had forecast 2023 global growth at 3.0%. On the global front, U.S. dollar held its ground on Wednesday as traders waited for this week's U.S. consumer price data to see whether it will confirm that inflation is in retreat. Finally, the rupee ended at 81.56 (Provisional), stronger by 18 paise from its previous close of 81.74 on Tuesday.

The FIIs as per Wednesday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 6438.43 crore against gross selling of Rs 8263.80 crore, while in the debt segment, the gross purchase was of Rs 223.66 crore against gross selling of Rs 89.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.85 crore against gross selling of Rs 9.54 crore.

The US markets ended sharply higher on Wednesday as investors were optimistic ahead of an inflation report that could give the Federal Reserve room to dial back on its aggressive interest rate hikes. Asian markets are trading mostly in green on Thursday as investors look ahead to the US consumer price index report. Indian markets ended a highly volatile session on a flat note on Wednesday amid unabated foreign fund outflows and a weak trend in index heavyweight Reliance Industries. Today, domestic indices are likely to get positive start tracking gains across global markets. Investors will be eyeing on Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be out later in the day. The weekly Nifty F&O expiry also may trigger some volatility in the trading day. Traders will be taking encouragement as the government data showed the country's gross direct tax collection rose 24.58 per cent to Rs 14.71 lakh crore till January 10 this fiscal, buoyed by an upsurge in personal income tax mop-up. After adjusting refunds, net direct tax collection stood at Rs 12.31 lakh crore, 19.55 per cent higher than the net collections for the corresponding period of last year. Meanwhile, Road Transport and Highways Minister Nitin Gadkari has said India and Japan will undertake joint projects for digital transformation in the areas of Intelligent Transport Systems (ITS) and eco-friendly mobility. However, there may be some cautiousness as a World Economic Forum report said a cost of living crisis, digital inequality, geopolitical contest for resources, natural disasters and extreme weather events are the biggest risks for India over the short and medium term. Besides, as per provisional data available on the NSE, foreign institutional investors (FII) have net-sold shares worth Rs 3,208.15 crore, continuing selling for the 14th session in a row, on January 11. Healthcare industry stocks will be in focus as rating agency ICRA said the hospital industry is expected to post occupancy levels of 62-64 per cent in FY23 and FY24 backed by demand for elective surgeries, medical tourism and organised players improving their market share. The average revenue per occupied bed (ARPOB) is likely to grow 8-10 percent. Sah Polymers is likely to debut on the bourses. There are expectations that the stocks will debut on positive note following the better-than-expected response to its IPO. Overall the IPO was subscribed 17.5 times. Moreover, investors will be looking ahead to the quarterly earnings from some important companies like Infosys, HCL Technologies for more cues.

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

Nifty Top volumes

• NTPC's coal production increased 51 per cent year-on-year from its captive mines to 14.55 million tonne (MT) in April-December 2022.
• Bharti Airtel has launched its cutting edge 5G services in Kochi. 
• Coal India's subsidiary -- Northern Coalfields is all set to start production of M-Sand, a material used for construction works. 
• Tech Mahindra has entered into a global strategic partnership with Retalon, a leader in retail AI and predictive analytics solutions.