Tracking positive cues from India's retail inflation data, Indian benchmark indices finished the productive day of trade with gains of over half a percent. Banking sectors' stock led the position in the markets. Despite making cautious start, key gauges soon gained traction to trade higher, as traders got support with a report that retail inflation based on Consumer Price Index (CPI) eased to a three-month low of 5.1 per cent in January 2024. Inflation was at 5.69 per cent in December 2023. It was 6.52 per cent in January 2023. Investors overlooked report that India's industrial production growth slowed to 3.8 per cent in December 2023, mainly due to poor performance of mining and power generation segments. The factory output growth measured in terms of the Index of Industrial Production (IIP) was at 5.1 per cent in December 2022. Sentiments also got some support after a survey conducted by Federation of Indian Chambers of Commerce and Industry (FICCI) has revealed sustained and continued growth for India's manufacturing sector in the last two quarters of 2023-24 (October-March). Compared to the previous quarter, October-December, when 73 per cent of respondents had reported higher production levels, in the current January-March quarter, around 87 per cent of respondents expected either higher or the same level of production. Despite some profit booking in noon deals, markets regained momentum and continued trading in green. Some support came in with Reserve Bank Governor Shaktikanta Das' statement that lower government borrowings than the market estimates will free more capital for the private sector resulting in easing of inflation and bolstering growth. Markets added gains end near day's high levels, as investors continued to hunt for fundamentally strong stocks. Meanwhile, the Periodic Labour Force Survey (PLFS) data, released by the National Statistical Office showed that the jobless rate in urban India marginally declined further in Q3 (October-December) of FY24 to 6.5 per cent from 6.6 per cent in the preceding quarter, thus reflecting continued improvement in the labour markets. Investors now turn their attention towards U.S. inflation data due later in the day. Finally, the BSE Sensex rose 482.70 points or 0.68% to 71,555.19 and the CNX Nifty was up by 127.20 points or 0.59% to 21,743.25.

The US markets ended deeply in red on Tuesday with Dow Jones Industrial Average settling cut of over 500 points following the release of a highly anticipated Labor Department report showing consumer prices in the U.S. increased by slightly more than expected in the month of January. The Labor Department said its consumer price index (CPI) rose by 0.3 percent in January after inching up by 0.2 percent in December. Street had expected consumer prices to edge up by 0.2 percent. While the report also showed the annual rate of consumer price growth slowed to 3.1 percent in January from 3.4 percent in December, street had expected the pace of growth to slow to 2.9 percent. Excluding food and energy prices, core consumer prices climbed by 0.4 percent in January after rising by 0.3 percent in December. Core prices were expected to increase by 0.3 percent. The annual rate of core consumer price in January came in unchanged from the previous month at 3.9 percent. The pace of core price growth was expected to decelerate to 3.7 percent. Treasuries yields surged in response to the data, with the yield on the benchmark ten-year note reaching its highest levels in two months. On the sectoral front, Gold stocks saw substantial weakness on the day, dragging the NYSE Arca Gold Bugs Index down by 6.5 percent to a four-month closing low. The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for April delivery tumbling $25.80 to $2,007.20 an ounce. Significant weakness was also visible among networking stocks, which pulled back sharply after surging in the previous session. After jumping by 2.5 percent during Monday's trading, the NYSE Arca Networking Index plunged by 4.4 percent.

Crude oil futures ended higher on Tuesday amid concerns about supply due to the ongoing tensions in the Middle East, where Houthi militants continue to attack commercial vessels in the Red Sea. A drop in Russian crude oil exports also contributed to the increase in oil prices. However, data showing consumer price inflation in the U.S. rose by more than expected in the month of January has dashed hopes of an early rate cut by the Federal Reserve and lifted the dollar higher. The dollar's rise capped oil's advance. Benchmark crude oil futures for March delivery rose $0.95 or about 1.25% to settle at $77.87 a barrel on the New York Mercantile Exchange. Brent crude for April delivery surged $0.77 or about 0.94% to $82.77 per barrel on London's Intercontinental Exchange.  

Indian rupee settled flat on Tuesday as the support from a rally in domestic equities was negated by a strong greenback overseas and rising crude oil prices. Meanwhile, retail inflation based on Consumer Price Index (CPI) eased to a three-month low of 5.1 per cent in January 2024. Inflation was at 5.69 per cent in December 2023. It was 6.52 per cent in January 2023. Furthermore, India's industrial production growth slowed to 3.8 per cent in December 2023, mainly due to poor performance of mining and power generation segments. The factory output growth measured in terms of the Index of Industrial Production (IIP) was at 5.1 per cent in December 2022. On the global front, the dollar flirted with the psychological threshold of 150 yen on Tuesday and held broadly steady ahead of a key reading on U.S. inflation due later in the day. Finally, the rupee ended flat with its previous close of 83.00 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 9178.87 crore against gross selling of Rs 8958.50 crore, while in the debt segment, the gross purchase was of Rs 906.87 crore with gross sales of Rs 178.04 crore. Besides, in the hybrid segment, the gross buying was of Rs 40.96 crore against gross selling of Rs 27.17 crore.

The US markets ended significantly lower on Tuesday after a higher-than-expected consumer inflation reading pushed back market expectations of imminent interest rate cuts, driving U.S. Treasury yields higher. Asian markets are trading in red on Wednesday tracking overnight losses on Wall Street. Indian markets ended higher on Tuesday amidst buying in heavyweights such as ICICI Bank and Reliance Industries (RIL). The sentiment was boosted by easing of domestic inflation and India's growing weightage in the MSCI global indices. Today, markets are likely to get gap-down opening following sell-off on Wall Street after hotter-than-expected US inflation data dampened hopes for quick interest rate cuts by the Federal Reserve. Traders may take note of report that aided by interest-free loans from the Centre, capital expenditure by states jumped by 40% on year in the first nine months of the current financial year compared with a 7% rise in the year-ago period. However, some support will come as oil prices fell in early Asian trade on Wednesday after a U.S. industry group reported crude stocks rose more than expected last week and as investors reined in expectations for interest rate cuts by the U.S. Federal Reserve. Foreign fund inflows likely to aid sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 376.32 crore on February 13, provisional data from the NSE showed. Some support may come as Prime Minister Narendra Modi asserted that the country will emerge as the third largest economy in the world in coming years. Besides, the Insurance Regulatory and Development Authority of India (Irdai) has said Bima Sugam - Insurance Electronic Marketplace formed under the Companies Act, 2013 - will be a not-for-profit entity. As per the Insurance Regulatory and Development Authority of India (Bima Sugam - Insurance Electronic Marketplace) Regulations, 2024, consumers shall not be charged for availing services of Bima Sugam. Auto components sector stocks will be in focus as ICRA said auto components sector growth is likely to moderate to around 5-7 per cent in FY25 thanks to a possibility of moderation in domestic volume growth and a weak outlook for exports. Credit rating agency ICRA projected that its sample of 45 auto-ancillaries (with aggregate annual revenues of Rs 2.7 trillion in FY23) would grow by 9-11 per cent in FY24, driven by healthy domestic demand. Meanwhile, Adani group stocks will be in limelight as Moody's Investor Group said it has changed the outlook on debt papers of four Adani Group companies to stable from negative, and maintained the stable outlook on the other four companies. It affirmed the ratings of all eight companies.

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

Nifty Top volumes

• Infosys has entered into strategic collaboration with Pacific International Lines, a leading Singapore-based shipping company with strong networks in Asia, Africa, Middle East, Latin America and Oceania.
• JSW Steel has entered into 50:50 joint venture with JFE Steel Corporation, Japan for the production of Grain Oriented Electrical Steel in India.
• Tata Motors has signed a MoU with Bandhan Bank, one of India's fastest-growing private sector banks, to offer convenient financing solutions to its commercial vehicle customers.
• Bharti Airtel has launched ten new, next-gen Company owned stores in the city of Vadodara.