Indian equity benchmarks experienced volatility but ultimately closed higher on Monday driven by gains in Basic Materials, Metal and Realty shares despite weakness in global markets. After making a cautious start, key gauges managed to keep their heads above water for most part of the session, as traders took support with Union minister Piyush Goyal's statement that India is aiming to achieve the $2 trillion export target by 2030 and in the process it is moving this industry out of the government support to make it self-sustaining and cost competitive. Some support also came with Chief Economic Advisor V Anantha Nageswaran's statement that the country's economic growth can become faster if the much-awaited private capital formation kicks into higher gear. He said that post-COVID financial balance sheets of corporates have been positive. Adding more optimism, a report noted that foreign portfolio investors (FPIs) injected Rs 26,505 crore into the Indian equity markets in the first six trading sessions of this month on expectations of political stability after the BJP stormed to power in three major states and robust economic growth. Some solace also came as Federation Indian Chambers of Commerce and Industry (Ficci) expects the economy to grow at 7.5 to 8 per cent in the current fiscal and 8 per cent in 2024-25 on the back of strong growth momentum, positive sentiments and rising private investments. Besides, India's foreign exchange reserves increased to $604 billion as on December 1, surpassing the $600 billion mark after a gap of about four months. However, gains remained capped as some concern came with the Reserve Bank of India's (RBI's) forward looking surveys showing that households expect some rise in price and inflationary pressures across major product groups for the year ahead. Consumers retained negative sentiments on both the current and future price conditions. Expectations regarding overall prices and inflation over the next three months were more aligned with those of food products and services. Finally, the BSE Sensex rose 102.93 points or 0.15% to 69,928.53 and the CNX Nifty was up by 27.70 points or 0.13% to 20,997.10.

The US markets settled higher on Monday ahead of the Federal Reserve's monetary policy announcement on Wednesday. With the Fed widely expected to leave interest rates unchanged, traders are likely to focus more closely on the central bank's accompanying statement and projections. Optimism the Fed could pivot to cutting interest rates as soon as March 2024 has contributed to recent strength on markets, although last Friday's strong than expected jobs data has led to speculation the Fed could wait until May to begin lowering rates. On the sectoral front, semiconductor stocks moved sharply higher on the day, driving the Philadelphia Semiconductor Index up by 3.4 percent to its best closing level in almost two years. Considerable strength was also visible among networking stocks, as reflected by the 2.5 percent gain posted by the NYSE Arca Networking Index. Transportation stocks also showed a strong move to the upside over the course of the session, with the Dow Jones Transportation Average climbing by 1.2 percent. Meanwhile, gold stocks moved lower along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 1.1 percent. Among individual stocks, chares of Macy's (M) moved sharply higher following reports an investor group consisting of Arkhouse Management and Brigade Capital has offered to acquire the department store chain for $5.8 billion. Health insurer Cigna (CI) also surged after reportedly abandoning efforts to acquire rival Humana (HUM) and announcing a $10 billion increase in its share repurchase authorization.

Crude oil futures ended higher on Monday as the U.S. announced plans to refill its Strategic Petroleum Reserve (SPR) through to May, signaling it will buy 3 million barrels of crude oil until March. However, the upside was just marginal due to continued uncertainty about the outlook for energy demand, and on worries the output cuts by OPEC+ may not be sufficient to restrict inventories any significantly low. Benchmark crude oil futures for January delivery added $0.09 or about 0.13 percent to settle at $71.32 a barrel on the New York Mercantile Exchange. Brent crude for February delivery surged $0.19 or about 0.25 percent to settle at $76.03 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher on Monday amid positive sentiment in the domestic equity market. Traders got support as Federation Indian Chambers of Commerce and Industry (Ficci) expects the economy to grow at 7.5 to 8 per cent in the current fiscal and 8 per cent in 2024-25 on the back of strong growth momentum, positive sentiments and rising private investments. There will, however, be geopolitical pressure points that may have a bearing on India's growth prospects. On the global front, U.S. dollar rallied against Japan's yen on Monday after a report said the Bank of Japan saw little need to end negative interest rates in December, contrary to some investors' expectations. Meanwhile, China's yuan fell after data showed deflation in the country worsened in November. Finally, the rupee ended at 83.37 (Provisional), stronger by 3 paise from its previous close of 83.40 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 19397.36 crore against gross selling of Rs 15403.41 crore, while in the debt segment, the gross purchase was of Rs 1570.78 crore with gross sales of Rs 411.82 crore. Besides, in the hybrid segment, the gross buying was of Rs 81.48 crore against gross selling of Rs 62.95 crore.

The US markets ended higher on Monday ahead of major market catalysts this week that include inflation readings and the Federal Reserve's policy announcement. Asian markets are trading in green on Tuesday ahead of the final US Federal Reserve meeting of the year. Indian markets traded with volatility but ended at new highs on Monday on the back of positive momentum in select banking, metal and IT shares. Today, markets are likely to get an optimistic start mirroring firm global cues. Investors will be looking ahead to the Index of Industrial Production (IIP) for the month of October and Consumer Price Index (CPI) for the month of November to be out later in the day for more directional cues. Foreign fund inflows likely to aid sentiments in domestic markets. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FIIs) net bought shares worth Rs 1,261.13 crore on December 11. Some support will come as Finance Minister Nirmala Sitharaman said retail inflation is now stable and temporary increases in inflation on a few occasions are caused by demand-supply mismatches arising out of global shocks and adverse weather conditions. Traders will be taking encouragement with the Reserve Bank of India (RBI) revising the GDP growth rate estimate upwards to 7 percent in the current fiscal, Neelkanth Mishra, a member of the Prime Minister's economic advisory council (PM-EAC), said that India may even exceed that figure as the total factor productivity (TFP) continues to be strong due to growth in services. Traders may take note of report that the government is likely to stick to the budgeted estimate of total tax collection target of Rs 33.61 lakh crore for current fiscal in the revised estimates. So far, direct tax collection is up by about 20 per cent and indirect tax is higher by 5 per cent. There will be some reaction in aviation industry stocks with report that the growth in India's domestic aviation capacity in calendar year 2023 (CY23) was the sixth highest among 20 major domestic markets, compared to the pre-pandemic year of CY19. The domestic capacity in the country surpassed the pre-pandemic level seen in CY19 and was up 5 per cent in CY23.

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

Nifty Top volumes

• Tata Motors is all set to increase the price of its commercial vehicles with effect from January 1, 2024, up to 3%.
• JSW Steel has reported consolidated Crude Steel production for the month of November 2023 at 22.04 lakh tonnes, that grew by 11% as against 19.94 lakh tonnes in November 2022.
• BPCL and Tata Passenger Electric Mobility have signed a MoU to collaborate in establishing public charging stations across India.
• Eicher Motors' motorcycle arm -- Royal Enfield has opened its first warehouse in the eastern region to cater to the needs for spare parts.