Mixed global signals may trigger market volatility

GIFT Nifty:

The GIFT Nifty December futures contract is currently down 5 points, indicating a flat-to-negative start for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 6,409.86 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 2,706.48 crore in the Indian equity market on 13 December 2024, provisional data showed.

According to NSDL data, FPIs have bought shares worth over Rs 17349.20 crore (so far) in the secondary market during December 2024. This follows their sale of shares worth Rs 39315.78 crore in November 2024.

Global Markets:

Asian shares mostly rose on Wednesday, shrugging off modest declines on Wall Street as investors awaited the Federal Reserve's final interest rate decision of the year. While a 25-basis-point rate cut is widely anticipated, the market is keenly focused on the Fed's outlook for next year, given the potential impact of proposed policies that could reignite inflationary pressures.

 

Japan's trade balance unexpectedly improved in November, supported by stronger-than-expected exports driven by increased demand from the U.S. and China and a weaker yen. The trade deficit narrowed to 117.6 billion yen ($770 million).

US indices retreated on Tuesday as investors exercised caution ahead of the rate decision, with the tech sector experiencing a slight pullback from recent gains. The S&P 500 fell 0.4% to 6050.61 points, the NASDAQ Composite lost 0.3% to 20,108.30 points, and the Dow Jones Industrial Average closed 0.6% lower at 43,449.90 points. NVIDIA Corporation dropped 1.2%, while Alphabet fell 0.5%. Pfizer rose 4.6% after confirming that its 2025 profit expectations remain largely unchanged.

Meanwhile, data showed US retail sales rose by 0.7% in November, exceeding forecasts. This robust figure suggests the economy remains strong and consumer spending remains healthy, despite challenges like inflation and high interest rates. This strength is underpinned by a solid job market and stable household finances.

Domestic Market:

The domestic equity benchmarks continued their downward spiral on Tuesday, marking their second consecutive day of significant losses. The Nifty closed below the 24,350 mark, dragged down by heavyweights like Reliance Industries, TCS, and HDFC Bank. PSU banks, metals, and energy stocks witnessed significant declines. Investors adopted a cautious stance ahead of a crucial week of central bank meetings. The S&P BSE Sensex tumbled 1,064.12 points or 1.30% to 80,684.45. The Nifty 50 index dropped 332.25 points or 1.35% to 24,336.

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