Indian equity benchmarks ended higher for the third consecutive session on Tuesday amid robust buying in heavyweights like NTPC, Mahindra & Mahindra and Wipro. Markets made cautious start as a surge in new Covid-19 cases weighted down on the sentiments. India logged a total of 628 new Covid-19 cases in the last 24 hours, while the active caseload jumped to 4,054. However, markets soon gained traction and traded higher as sentiments turned optimistic with Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Rajesh Kumar Singh stating that foreign direct investments into India is likely to gather momentum in 2024 as healthy macroeconomic numbers, better industrial output as well as attractive PLI schemes will attract more overseas players amid geopolitical headwinds and tighter interest rate regime globally. Some comfort also came with Union Food and Consumer Affairs Minister Piyush Goyal's statement that the Centre has taken many proactive steps in the past few years to control retail prices of food items, and that the government would keep inflation under control while ensuring the country's economic growth. Markets maintained their gains in late afternoon session, taking support from a private report stating that the Indian economy is likely to grow 6.7% in FY24, staying resilient despite external headwinds as domestic demand and improving investments provide support. Some support came with report that credit rating firm Fitch Ratings expects that India's resilient economic growth will boost demand of the corporates. It said rising demand and easing input cost pressure should boost margins of the corporates in the next financial year. Adding to the optimism, foreign portfolio investors (FPIs) have injected over Rs 57,300 crore into the Indian equity markets this month so far owing to political stability, robust economic growth, and a steady decline in the US bond yields. Finally, the BSE Sensex rose 229.84 points or 0.32% to 71,336.80 and the CNX Nifty was up by 91.95 points or 0.43% to 21,441.35.

The US markets ended higher on Tuesday, kicking off the final week of 2023 with expectations that the Federal Reserve will begin cutting interest rates as soon as March. All three major U.S. stock indexes rose in light trading a day after the Christmas holiday, with the S&P 500 touching its highest intraday level since January 2022. All three are on track for monthly, quarterly and annual gains. A surge by shares of Intel (INTC) provided a boost to the markets, with the semiconductor giant spiking by 5.2 percent to its best closing level in well over a year. The jump by Intel came following news the Israeli government has agreed to give the company a $3.2 billion grant toward the construction of a new $25 billion chip-making facility in southern Israel. On the sectoral front, Energy stocks saw considerable strength on the day, as the price of crude oil moved sharply higher amid concerns about geopolitical tensions. With crude for February delivery surging $2.01 to $75.57 a barrel, the Philadelphia Oil Service Index jumped by 2.1 percent and the NYSE Arca Oil Index climbed by 1.3 percent. Networking, banking and telecom stocks also showed notable moves to the upside over the course of the trading session.

Crude oil futures ended sharply higher on Tuesday on weak dollar amid rising optimism the Federal Reserve will start cutting rates from early 2024 after data showed a bigger than expected slowdown in consumer price growth in November. Further, oil prices also rose amid escalating tensions in the Middle East and concerns over trade disruptions due to several international firms stopping to transit via the Red Seas following the attacks on ships. Benchmark crude oil futures for January delivery rose $2.01 or 2.7 percent to settle at $75.57 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was up by $2.00 or 2.5 percent to settle at $81.07 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against dollar on Tuesday amid a strong American currency and outflow of foreign funds. Some cautiousness also came as crude oil prices nudged higher as investors focused on geopolitical tensions in the Middle East and optimism the U.S. Federal Reserve would soon start cutting interest rates, lifting global economic growth and fuel demand. Moreover, surge in new Covid-19 cases also weighted down on the sentiments. However, a positive equity market sentiment provided a cushion and restricted the fall in the Indian currency. On the global front, the dollar was trying to find a floor on Tuesday in holiday-thinned trade, pressured by signs that inflation in the world's largest economy is cooling which will likely give the Federal Reserve room to ease interest rates next year. Finally, the rupee ended at 83.19, weaker by 3 paise from its previous close of 83.16 on Friday.

The FIIs as per Tuesday'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 11728.14 crore against gross selling of Rs 12304.20 crore, while in the debt segment, the gross purchase was of Rs 2498.55 crore with gross sales of Rs 258.62 crore. Besides, in the hybrid segment, the gross buying was of Rs 52.12 crore against gross selling of Rs 54.58 crore.

The US markets ended higher on Tuesday kicking off the final week of 2023 with expectations that the Federal Reserve will begin cutting interest rates as soon as March. Asian markets are trading mostly in green on Wednesday on a positive handover overnight from Wall Street, coupled with a rally in Chinese gaming stocks. Indian markets shrugged off initial weakness and ended higher on Tuesday amid robust buying in heavyweights like HDFC Bank, Reliance Industries, Kotak Bank. Today, markets are likely to continue previous session's rally with positive start tracking firm global cues. Sentiments will get a boost as the Reserve Bank of India said India's current account deficit narrowed in the July-September quarter largely due to a lower merchandise trade deficit while services exports also grew. The current account deficit stood at $8.3 billion, or 1% of GDP, in the second quarter of fiscal 2023-24 as compared to $9.2 billion or 1.1% of GDP in the preceding quarter. The CAD stood at $30.9 billion or 3.8% in the same quarter a year ago. Some support will come with a report that as many as 746 applications have been approved till November 2023 under the Production Linked Incentive (PLI) schemes for 14 sectors such as pharma, white goods, and electronics. The schemes for 14 sectors were announced with an outlay of Rs 1.97 lakh crore to enhance India's manufacturing capabilities and exports. Traders may take note of report that the negotiations for the proposed free trade agreement (FTA) between India and Oman are moving at a fast pace and the pact is likely to be signed next month. Besides, the department for promotion of industry and internal trade (DPIIT) is working with 24 sub-sectors, including furniture, aluminium, agrochemicals and textiles, to promote domestic manufacturing, boost exports and reduce imports. The commerce and industry ministry said that since its launch, Make in India has made significant achievements and is now focusing on 27 sectors under Make in India 2.0. However, traders may be concerned as ratings agency India Ratings and Research said India's fiscal deficit is likely to breach the government's target of 5.9% in FY24 owing to higher revenue expenditure and lower than budgeted nominal GDP. It noted that although higher tax and non-tax revenue collections may offset the shortfall in divestment earnings, a likely second supplementary demand for grants will upset fiscal calculations, pushing the deficit to 6% of GDP. IT stocks will be in focus as a report by industry body Nasscom showed that nearly 60 per cent of businesses surveyed reported having either matured Responsible AI (RAI) practices and policies or having initiated formal steps towards adoption of such responsible practices. Meanwhile, Happy Forgings, Credo Brands Marketing (Mufti Menswear) and RBZ Jewellers are slated to debut on the exchanges today.

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

Nifty Top volumes

• IndusInd Bank has launched IndusInd Bank eSvarna, India's first Corporate Credit Card on RuPay network.
• Bajaj Finance has raised Rs 1,057.33 crore through the allotment of 48,500 Secured Redeemable NCDs, at the face value of Rs 1 lakh each.
• A global company has terminated a multi-year contract worth $1.5 billion with Infosys.
• Power Grid Corporation of India, pursuant to its selection as the successful bidder under Tariff based competitive bidding, has acquired Vataman Transmission, the Project SPV.