Indian equity benchmarks rallied over a per cent to hit record closing highs on Thursday, propelled by intense buying in Realty, IT and TECK stocks after the US Federal Reserve kept its key interest rate unchanged and signalled rate cuts next year. Markets made a gap-up start and strengthened further as the session progressed, as traders took encouragement with Asia Development Bank (ADB) stating that India's economy would grow 6.7 per cent in Financial Year 2023-24 (FY24), raising the estimate from 6.3 per cent it made in September. The lender revised its estimate based on India's higher-than-expected gross domestic product (GDP) growth, of 7.6 per cent, in the second quarter of FY24. Domestic sentiments remained firm with provisional data from the National Stock Exchange (NSE) showing that foreign institutional investors (FIIs) net bought shares worth Rs 4,711 crore on December 13. Sentiments remained up-beat in second half of trading session, taking support from Niti Aayog Vice Chairman Suman Bery's statement that agriculture will play a central role in India's development trajectory as strong rural demand supports manufacturing and economic revival. Additional support came with CEO of the US-India Strategic and Partnership Forum (USISPF) Mukesh Aghi's statement that the relationship between India and the US has moved in a positive direction ranging from trade to defence and the two nations have shown a sense of deep understating of each other's differences. Adding to the optimism, the Organisation of Petroleum Exporting Countries (OPEC) expects world oil demand to grow to 2.2 million barrels per day (bpd) in 2024 for an average of 104.4 million bpd, unchanged from its previous assessment. The oil cartel said in a report that oil demand is expected to be supported by resilient global GDP growth, amid continued improvements in economic activity in China. Traders paid no heed towards data showing that India's inflation based on wholesale price index (WPI) rose 0.26 per cent in November from a year ago driven by the increase in prices of food articles, electricity, computer, electronics & optical products, motor vehicles, other transport equipment and other manufacturing etc. In October, the WPI inflation was -0.52 per cent. Finally, the BSE Sensex rose 929.60 points or 1.34% to 70,514.20 and the CNX Nifty was up by 256.35 points or 1.23% to 21,182.70.

The US markets ended higher on Thursday, magnifying their previous session's rallies, after the Commerce Department released a report showing an unexpected increase in U.S. retail sales in November. The Commerce Department said retail sales rose by 0.3 percent in November after slipping by a downwardly revised 0.2 percent. Street had expected retail sales to edge down by 0.1 percent, matching the dip originally reported for the previous month. Excluding sales by motor vehicle and parts dealers, retail sales inched up by 0.2 percent in November after coming in unchanged in October. Ex-auto sales were expected to slip by 0.1 percent. Meanwhile, the Labor Department released a separate report showing first-time claims for U.S. unemployment benefits unexpectedly decreased in the week ended December 9th. The report said initial jobless claims fell to 202,000, a decrease of 19,000 from the previous week's revised level of 221,000. Street had expected jobless claims to come in unchanged compared to the 220,000 originally reported for the previous week. On the BSE sectoral front, Housing stocks turned in some of the market's best performances on the day, driving the Philadelphia Housing Sector Index up by 5.8 percent to a record closing high. Substantial strength was also visible among banking stocks, as reflected by the 5.1 percent spike by the KBW Bank Index. The index reached its best closing level in over nine months. Oil service stocks also moved sharply higher along with the price of crude oil, with the Philadelphia Oil Service Index surging by 4.4 percent.

Crude oil futures ended sharply higher on Thursday lifted by a weak dollar. The dollar tumbled on hopes for interest rate cuts after the U.S. Federal Reserve kept interest rates steady, as widely expected, and hinted at three rate cuts in 2024, citing easing inflation and slowing growth. Besides, concerns about the security of Middle East supplies following a tanker attack in the Red Sea off Yemen's coast contributed as well to the uptick in oil prices. Benchmark crude oil futures for January delivery rose $2.11 or about 3 percent to settle at $71.58 a barrel on the New York Mercantile Exchange. Brent crude for February delivery surged $2.35 or about 3.16 percent to settle at $76.61 a barrel on London's Intercontinental Exchange.  

Rupee ended higher on Thursday as the greenback weakened in the overseas markets following signals that rate hikes by the US Federal Reserve were over. Traders got support as Asia Development Bank (ADB) said India's economy would grow 6.7 per cent in Financial Year 2023-24 (FY24), raising the estimate from 6.3 per cent it made in September. The lender revised its estimate based on India's higher-than-expected gross domestic product (GDP) growth, of 7.6 per cent, in the second quarter of FY24. Investors overlooked report that India's inflation based on wholesale price index (WPI) rose 0.26 per cent in November from a year ago. On the global front, sterling was on the front foot against the dollar on Thursday ahead of a Bank of England meeting at which analysts expect rate-setters to push back on expectations of early cuts in 2024, a different stance from the Federal Reserve a day earlier. Finally, the rupee ended at 83.32 (Provisional), stronger by 8 paise from its previous close of 83.40 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 19554.92 crore against gross selling of Rs 14254.57 crore, while in the debt segment, the gross purchase was of Rs 364.53 crore with gross sales of Rs 584.93 crore. Besides, in the hybrid segment, the gross buying was of Rs 85.57 crore against gross selling of Rs 66.79 crore.

The US markets ended higher on Thursday with strong retail sales data for November and hopes of deeper rate cuts next year underpinning sentiment. Asian markets are trading mostly in green on Friday as investors await key economic data out of China, including November house prices, industrial output, and retail sales data. Indian markets ended at their record highs on Thursday amid the US Federal Reserve's dovish pivot, and forecasts of rate cuts in 2024. Today, domestic indices are likely to continue their previous session's bull run with optimistic start as the prospect of deep rate cuts from central banks next year boosted global sentiment. Traders will be taking encouragement with report that net direct tax collection in the eight months of the current fiscal touched 58.34 per cent of Budget Estimates (BE) at Rs 10.64 lakh crore. The Ministry of Finance said the net tax collection for April-November stood at Rs 10.64 lakh crore, which is 23.4 per cent higher than the corresponding period of last year. Some support will come with India Ratings' report that the liquidity conditions in the Indian banking system are expected to see substantial improvement from January 2024, owing to a surge in government spending ahead of the vote on account and Foreign Portfolio Investment (FPI) flows in equity markets. It added that the liquidity surplus could touch up to Rs 50,000 crore. Meanwhile, the Insurance Regulatory and Development Authority of India (IRDAI) has released an Exposure Draft proposing to increase the surrender value of non-linked life insurance policies. The surrender value is the amount that the policyholder receives from the insurance company if they decide to terminate their policy before its maturity. There will be some buzz in the automobile industry stocks as S&P Global Mobility forecast showed that India has been the fastest growing among the world's 10 largest automobile markets this calendar year when compared to the pre-pandemic year of 2019. India is the world's third largest light vehicle (includes cars and light utility vehicles less than 6 tonnes) market, behind China and the United States.

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

Nifty Top volumes

• Tata Steel has signed a MoU with Imperial College London to set up a Centre for Innovation in Sustainable Design and Manufacturing in London.
• UltraTech Cement is planning to increase the overall share of green energy in its total energy mix to 85% by 2030.
• HCL Technologies has been selected by the Department of Transport and Planning in Victoria, Australia to automate the concession entitlement process for public transport users.
• SBI has executed transactions documents to buy a 6.35 per cent stake in Canpac Trends, which is in the business of paper packing solutions.