Stock market today: Nifty 50, Sensex slip ahead of CPI data; IT stocks shine on Fed rate cut optimism | Stock Market News

Indian markets experienced a volatile session on Thursday, December 12, despite a strong handover from Wall Street, as investors exercised caution ahead of India’s key retail inflation data, scheduled for release later in the day. 

According to a Mint poll of 16 economists, retail inflation is expected to have eased to 5.5% in November, down from 6.2% in October. Even if inflation moderated in November, it would still have exceeded the Reserve Bank of India’s (RBI) medium-term target of 4%, reflecting ongoing challenges in achieving sustained price stability.

IT stocks performed well in today’s session, with major heavyweights closing in the green. However, weak performances by Reliance Industries and private sector banks, including ICICI Bank, HDFC Bank, and Kotak Mahindra Bank, dragged the markets lower.

The Nifty 50 closed the session down by 0.38%, settling at 24,548 points, while the Sensex ended with a 0.29% loss at 81,289 points. Broader markets also saw declines, with the Nifty Midcap 100 finishing 0.46% lower at 59,021 points, and the Nifty Smallcap 100 index recording a steeper drop of nearly 1%, closing at 19,466 points. 

Commenting on today’s market performance, Vinod Nair, Head of Research, Geojit Financial Services said, “The market continued to remain range bound ahead of domestic CPI data and weakening rupee. Though inflation is anticipated to drop, investors are maintaining a close vigil on the vegetable prices, which will determine the future rate trajectory. Meanwhile, the Nifty IT index reached a new high after US inflation data met expectations, boosting hopes for a Fed rate cut next week.”

IT outperforms with sustained rally; Media stocks face extended pressure

Indian IT stocks extended their winning streak for the fourth consecutive session on Thursday, December 12, driven by heightened expectations of a Federal Reserve interest rate cut next week. These expectations were bolstered after both headline and core U.S. inflation rates aligned with market forecasts, clearing the path for the Fed to proceed with rate reductions.

Riding this positive sentiment, the Nifty IT index surged 1.4% in intraday trade, crossing the 46,000 mark for the first time to hit a fresh all-time high of 46,002 points, surpassing its previous record of 45,398 set in the prior session. The index finally ended at a record high of 45,701 points, marking a gain of 0.77%.

In the U.S., consumer prices rose in November at the fastest pace in seven months. However, this is unlikely to deter the Fed from cutting interest rates for the third time this year, given signs of a cooling labor market, as per the market experts. 

According to the CME FedWatch Tool, traders now assign a 98.6% probability of a 25-basis-point rate cut on December 18, up from 86% before the release of the U.S. inflation data.

Among the major sectoral indices, the Nifty IT index was the sole gainer, ending in the green, while all other indices closed lower. Nifty Media led the losses with a 2% decline, followed by Nifty FMCG, Nifty PSE, Nifty CPSE, Nifty PSU Bank, Nifty Auto, Nifty Energy, Nifty Infra, and Nifty Consumer Durables, each registering losses of more than 0.50%.