Indian equity benchmarks witnessed consolidation on Wednesday and ended the session on quiet note. Markets started the session on optimistic note as sentiments remained upbeat with report that a mega immunisation drive against Covid-19 has kicked off with nine flights transporting over 5.6 million doses of the vaccine to 13 cities across the country on Tuesday. Kerala will get the first consignment of over 400,000 coronavirus vaccines today. Traders also took support from the government data showing that Consumer Price Index (CPI)-based inflation eased to 4.59 per cent in December 2020 compared to 6.93 per cent in November. Food inflation declined to 3.41 per cent in December, compared to 9.5 per cent in the previous month. However, markets lost grip as the day progressed with traders turning pessimistic with the Ministry of Statistics and Programme Implementation data showing that the Index of Industrial Production (IIP) contracted by 1.9 per cent in November as against 3.6 per cent growth in October. Market extended losses as the State Bank of India's (SBI) Ecowrap report has said India's fiscal deficit in the current financial year (FY21) is likely to reach 7.4 per cent of the GDP on the back of enhanced government expenditure amid the pandemic. The report noted that as per the first advanced estimate of the GDP, real GDP will contract by 7.7 per cent in FY21, and nominal GDP growth is expected at (-) 4.2 per cent. Accordingly, the nominal GDP for FY22 would grow by 15 per cent to Rs 224.04 lakh crore. But, buying in last leg of trade helped markets to recouped all their losses and end flat. Traders took note of report that Union Ministry of Commerce and Industry has said that India's new Foreign Trade Policy 2021-2026, under formulation, will come into effect from April 1, 2021, for five years and will strive to make the country a leader in international trade. Finally, the BSE Sensex slipped 24.75 points or 0.05% to 49,492.32, however the CNX Nifty was up by 1.40 points or 0.01% to 14,564.85.

The US markets ended mostly higher on Wednesday as treasuries regained ground following recent weakness, leading to a drop in bond yields. The yield on the benchmark ten-year note, which moves opposite of its price, fell by 5 basis points to 1.088 percent after ending the previous session at its highest closing level since mid-March. The drop in treasury yields contributed to significant strength among interest rate sensitive stocks such as utilities and commercial real estate stocks. On the economic data front, the Labor Department released a report showing US consumer prices increased in line with street estimate in the month of December. The report said the consumer price index rose by 0.4 percent in December after edging up by 0.2 percent in November. The price growth matched expectations. The Labor Department said the advance by the consumer price index was driven by an 8.4 percent jump in gasoline prices, which accounted for more than 60 percent of the overall increase. Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in December after rising by 0.2 percent in November. The uptick in core prices also matched Street estimate.

Crude oil futures ended lower on Wednesday on Concerns about outlook for energy demand amid continued rise in coronavirus cases and imposition of tighter restrictions on movements hurt oil prices. Oil prices dropped despite data showing a larger than expected drop in crude inventories last week. Data released by Energy Information Administration (EIA) showed crude inventories fell 3.247 million barrels for the week ending January 8, compared with street expectation for a 2.26 million-barrel draw. The American Petroleum Institute's report showed crude inventories in the US dropped by 5.8 million barrels for the week ending January 8. Crude oil futures for February fell $0.30 or 0.6 percent to settle at $52.91 a barrel on the New York Mercantile Exchange. March Brent crude dropped $0.53 or 0.94 percent to settle at $56.05 a barrel on London's Intercontinental Exchange.

Continuing previous session gains, Indian rupee ended stronger against dollar on Wednesday amid fresh selling of American currency by banks and exporters. Some comfort came as data showing that Consumer Price Index (CPI)-based inflation eased to 4.59 per cent in December 2020 compared to 6.93 per cent in November. Food inflation declined to 3.41 per cent in December, compared to 9.5 per cent in the previous month. Traders ignored report that India's factory output or Index of Industrial Production (IIP) contracted 1.9 percent for November 2020 mainly due to poor showing by manufacturing and mining sectors. Industrial production of the country had grown at 3.6 per cent in October 2020 and 2.1 per cent in November 2019. On the global front, stabilizing U.S. Treasury yields helped the dollar trade back in positive territory on Wednesday, though investors remained bearish on the currency's near-term prospects. Finally, the rupee ended at 73.15, 10 paise stronger from its previous close of 73.25 on Tuesday.

The FIIs as per Wednesday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 9583.64 crore against gross selling of Rs 8642.53 crore, while in the debt segment, the gross purchase was of Rs 190.04 crore with gross sales of Rs 1520.60 crore. Besides, in the hybrid segment, the gross buying was of Rs 27.67 crore against gross selling of Rs 22.38 crore.

The US markets ended mostly in green on Wednesday as investors waited for details of the next US fiscal stimulus plan, to be announced by President-elect Joe Biden. Asian markets are trading mixed on Thursday as political events in Washington culminated in the impeachment of President Donald Trump. Indian markets snapped their three-day record-setting run and closed marginally lower after a choppy session on Wednesday as investors pocketed gains in banking and finance stocks amid mixed global cues. Today, the markets are likely to make cautious start amid mixed global cues. Investors are eyeing WPI data to be out later in the day. There will be some cautiousness as in the last 24 hours, India registered 17,015 fresh Covid-19 cases, taking the tally to 10,512,8311. The five most affected states by total cases are Maharashtra (1974488), Karnataka (928806), Andhra Pradesh (885234), Tamil Nadu (827614), and Kerala (819765). However, some support may come later in the day with a private report that economic activity continued with its pace of normalisation and the festivities helped narrow the deficits as compared to the year-ago period in December. It also revised up wits FY21 GDP forecast to a contraction of 6.7 per cent, as against the official estimate of a 7.7 per cent contraction in the pandemic-impacted fiscal year. Traders may take note of report that the Income Tax Department said it has issued refunds worth over Rs 1.73 lakh crore to more than 1.57 crore taxpayers in the ongoing fiscal till January 11. Of this, personal income tax refunds are worth Rs 57,139 crore, while corporate tax refunds are worth Rs 1.15 lakh crore. Meanwhile, amid rising incidents of harassments relating to online lending, the Reserve Bank constituted a working group to suggest regulatory measures to promote orderly growth of digital lending. There will be some reaction in insurance industry stocks with a report that non-life insurers have recorded around 12 per cent year-on-year (YoY) growth in gross premiums underwritten in December. This comes after low single-digit growth in November and contraction in September and October. Infrastructure stocks will be in focus with ICRA's report that there is a need to increase capital outlay in the road sector by at least 15 per cent besides expediting asset monetisation programme. There will be some reaction in textiles industry stocks with ICRA's report that the textile industry's performance will recover to pre-Covid levels in the next fiscal on account of boost in demands from domestic as well as export markets. The agency assigned outlook for the sector as stable for FY2022.

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

Nifty Top volumes

• Tech Mahindra has agreed to acquire 100% shareholding of Payments Technology Services.
• L&T's construction arm -- L&T construction has secured orders from prestigious clients for various businesses. 
• TCS is planning to acquire General Electric's stake in Tata Consultancy Services Saudi Arabia for $12,471 (about Rs 9.13 lakh). 
• Tata Motors has unveiled a new petrol variant of its premium hatchback Altroz with sales expected to begin from next week across the country.