The Indian stock market started the week a bit flat on Monday. Last Friday, it had a great week, the best since June! Investors seem to be taking a cautious approach as they await important inflation reports from both the U.S. and India this week.
The main index, S&P BSE Sensex, dropped 47.34 points or 0.06% to 81,661.78. The broader Nifty 50 index also fell slightly by 8.05 points or 0.03%, starting at 24,669.75.
Shares of State Bank of India and big player Larsen and Toubro (L&T) showed some strength, both gaining over 1%. Everyone is keeping an eye on the U.S. consumer price inflation (CPI) data coming out on Wednesday. This will help determine future interest rates and could affect foreign investment in countries like India.
In India, CPI data will be released on Thursday. This information could play a big role in the Reserve Bank of India (RBI) deciding when to cut rates.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented that the ongoing market rally could lift the Nifty higher, but he expressed concerns about the slowing Indian economy and how it might affect market momentum. He said, “The near-term trend is mildly positive, but we must be careful. While the U.S. market is doing well, we can’t be too optimistic. A Fed rate cut this month is likely and could keep the equity markets afloat, but the long-term picture is still uncertain.”
In Asia, shares faced challenges, with South Korean shares dropping by 1.4%. Meanwhile, Japan’s Nikkei index gained 0.3% due to an upward revision in economic growth, while Chinese stocks varied near flat. China’s consumer price index fell 0.6% in November, which meant annual inflation dropped to 0.2%. This highlights the need for stronger policy support.
This week, the European Central Bank is expected to cut interest rates by 25 basis points, with a small chance of a larger cut. U.S. stock futures, including S&P 500 and Nasdaq, remained mostly unchanged on Monday.
In currency news, the Indian rupee slipped 5 paise to 84.71 against the US dollar. Oil prices are slightly up, with Brent crude at $71.35 a barrel and U.S. crude at $67.44 per barrel, primarily due to events in the Middle East, even as investors worry about low demand from China.
On December 6, foreign institutional investors (FIIs) were selling stocks worth Rs 1,830.31 crore, while domestic institutional investors (DIIs) bought Rs 1,659.06 crore worth of stocks.
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