Indian equity benchmarks ended higher with gains of over a percent and settled near intraday high levels with frontline gauges recapturing their crucial 65,600 (Sensex) and 19,650 (Nifty) levels, amid a rally in global markets on favourable US inflation data. Key indices made gap-up opening and traded with a positive bias throughout the day as traders took encouragement with data showing that the retail inflation based on Consumer Price Index (CPI) eased for second consecutive month to a four-month low of 4.87 per cent in October 2023, in line with cooling prices of food items. This marks the second consecutive month when the consumer price index or CPI-based inflation has remained within the Reserve Bank of India's comfort zone of below 6 per cent. Sentiments remained positive as wholesale price inflation remained in the negative territory for the seventh month in a row in October at (-) 0.52 per cent on easing prices of food items. Some support also came with SBI's report stating that India's unemployment rate is at a record low and India's labour market is undergoing a deep structural transformation with self-entrepreneurship across all echelons and higher educational attainment emerging as key enablers. Markets added gains in late afternoon deals, as government data showed India's merchandise exports rose by 6.21 per cent to $33.57 billion in October 2023 even as trade deficit ballooned to $31.46 billion during the month. Imports increased to $65.03 billion in the month under consideration, as against $57.91 billion recorded in October 2022. Adding to the optimism, a private report said the Indian economy likely grew 6.7% in the July-September quarter, boosted by a strong performance by the services sector. It said robust manufacturing and construction activity also likely contributed to growth in the second quarter. Traders also took a note of report that Union Commerce Minister Piyush Goyal has revealed that the central government is poised to introduce a comprehensive e-commerce policy and rules. Finally, the BSE Sensex rose 742.06 points or 1.14% to 65,675.93 and the CNX Nifty was up by 231.90 points or 1.19% to 19,675.45.

The US markets ended higher on Wednesday, magnifying their previous session's gains, as the latest inflation data added to optimism about the outlook for interest rates. The Labor Department released a report showing an unexpected decrease in U.S. producer prices in the month of October. The Labor Department said its producer price index fell by 0.5 percent in October after rising by a revised 0.4 percent in September. Producer prices were expected to inch up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month. The report also said the annual rate of producer price growth slowed to 1.3 percent in October from 2.2 percent in September. Street had expected the pace of price growth to slow to 1.9 percent. Following yesterday's tamer than expected consumer price inflation data, the latest report reinforced expectations that the Federal Reserve is done raising interest rates. Meanwhile, a report released by the Commerce Department showed retail sales in the U.S. edged slightly lower in the month of October. The Commerce Department said retail sales slipped by 0.1 percent in October after jumping by an upwardly revised 0.9 percent in September. Street had expected retail sales to dip by 0.3 percent compared to the 0.7 percent increase originally reported for the previous month. On the sectoral front, airline stocks saw further upside after skyrocketing in the previous session, driving the NYSE Arca Airline Index up by 2.9 percent to its best closing level in well over a month. Significant strength was also visible among banking stocks, with the KBW Bank Index climbing by 1.4 percent to a two-month closing high.

Crude oil futures settled sharply lower on Wednesday after data showed a sharp increase in U.S. crude stockpiles and a significant jump in crude production. According to the data released by the U.S. Energy Information Administration (EIA), crude stockpiles in the U.S. increased by 17.5 million barrels in the last two weeks. Crude stocks rose by 3.6 million barrels last week to 421.9 million barrels, twice the expected increase. The EIA data also showed U.S. crude production was at a record 13.2 million barrels per day. Meanwhile, gasoline stocks dropped by 1.5 million barrels to 215.7 million barrels, while distillate stockpiles decreased 1.4 million barrels to 106.6 million barrels. Benchmark crude oil futures for December delivery fell $1.60 or 2 percent to settle at $76.66 a barrel on the New York Mercantile Exchange. Brent crude for January delivery dropped $1.29 or 1.56 percent to settle at $81.18 a barrel on London's Intercontinental Exchange.

Indian Rupee ended higher against the US dollar on Wednesday as the American currency retreated from its elevated levels after the US inflation came lower than expected. A firm trend in domestic equity markets and risk-on sentiment also supported the local unit. Traders took encouragement after India's consumer price index (CPI)-based retail inflation rate declined for the second consecutive month to a five-month low in October. Besides, wholesale price inflation remained in the negative territory for the seventh month in a row in October at (-) 0.52 per cent on easing prices of food items. Some support also came as India's exports rose by 6.21 per cent to $33.57 billion in October this year, as against $31.6 billion a year-ago. On the global front, dollar edged up on Wednesday after its biggest drop in a year the day before when cooler U.S. inflation data added to investor conviction that the Federal Reserve may not raise rates again, while the pound fell after slower UK inflation figures. Finally, the rupee ended at 83.10 (Provisional), stronger by 23 paise from its previous close of 83.33 on Monday.

The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 6330.34 crore against gross selling of Rs 7268.38 crore, while in the debt segment, the gross purchase was of Rs 438.43 crore with gross sales of Rs 16.29 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.28 crore against gross selling of Rs 6.14 crore.

The US markets ended higher on Wednesday with dovish Fed bets and an upbeat forecast from retailer Target helping underpin sentiment. Asian markets are trading mostly in red on Thursday as investors booked profit after hefty gains on Wednesday, and amid Biden-Xi bilateral meeting. Indian markets ended on a positive note on Wednesday on account of value buying amid softer-than-expected inflation readings from India and the US. Today, markets are likely to continue previous session's rally with positive start tracking overnight gains on Wall Street coupled with sharp fall in crude oil prices. Foreign fund inflows likely to aid domestic sentiments. Provisional data from the National Stock Exchange showed that foreign institutional investors net bought shares worth Rs 550.19 crore on November 15. Traders will be taking encouragement as CBDT (Central Board of Direct Taxes) Chairman Nitin Gupta said the government will exceed the Rs 18.23 lakh crore direct tax collection target set for the current fiscal. As per government data, the net direct tax collection between April 1 and November 9 this fiscal has swelled 22 per cent to Rs 10.60 lakh crore. Traders may take note of Finance Minister Nirmala Sitharaman's statement that India is expected to overtake Japan and Germany to emerge as the third largest economy in the world by 2027. However, there may be some cautiousness as the commerce ministry said India's merchandise trade deficit rose to a record high in October, propelled by a 95 percent increase in gold imports. Insurance industry stocks will be in focus with private report that the Insurance Regulatory and Development Authority of India (Irdai) has released an exposure draft on the Expenses of Management (EoM) including a commission for both life and non-life insurance companies, based on the recommendation from the Regulation Review Committee (RRC). There will be some reaction in aviation industry stocks as the rating firm ICRA said domestic air passenger traffic is expected to rise 11 per cent year-on-year (YoY) in October, reaching 126.4 lakh compared to around 114 lakh in October 2022.  On a sequential basis, domestic air passenger traffic growth is expected up 3.2 per cent compared to 122.5 lakh in September 2023 and 3 per cent higher than pre-Covid levels of 123 lakh in October 2019.

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

Nifty Top volumes

• Cipla's wholly owned subsidiaries -- Cipla (EU), UK and Meditab Holdings, Mauritius, have completed the sale of entire 51.18% stake held in Cipla Quality Chemical Industries, Uganda.
• Asian Paints has increased original installed production capacity at Khandala plant to 4,00,000 KL per annum in order to meet the medium-term capacity requirements of the Company.
• TCS has partnered with the Munch Museum in Oslo to create immersive and interactive drawing experiences for local visitors and global audiences.  
• Grasim Industries has reported 34.11% rise in its consolidated net profit at Rs 2,024.05 crore for Q2FY24 as compared to Rs 1,509.19 crore for the same quarter in the previous year.