Sensex, Nifty50 edge higher amid positive global cues; HCL Tech, Infosys up 1% ahead of results

Indian equity benchmarks Sensex and Nifty50 began Thursday's session nearly unchanged despite positive global cues ahead of a key inflation reading from the US that could give the Fed room to dial back on its current path of aggressive interest rate hikes. Gains in IT, consumer durables and auto shares pushed the headline indices higher though losses in oil & gas and metal stocks limited the upside. 

Both main gauges climbed up as much as 0.2 per cent in the first few minutes of trade. The Sensex gained 139.2 points to touch 60,244.7 at the strongest level of the day so far, and the Nifty50 went up to as high as 17,929.7, adding 34 points to its previous close, after a mixed start. The 30-scrip index began the day down 22.5 points at 60,083 though the Nifty opened with a gain of 25.2 points at 17,920.9.

Infosys and HCL Tech shares boosted the Nifty IT index, with both the IT majors due to report their financial results later in the day. This week, TCS reported a mixed set of results.  

A total of 32 stocks in the Nifty50 basket moved higher in early trade. HCL Tech, Titan, Wipro, Grasim, Coal India, Larsen & Toubro, HDFC Life, SBI Life and NEstle -- trading between 0.6 per cent and 1.5 per cent higher -- were the top gainers. On the other hand, Divi's, BPCL, Asian Paints, Hindalco, Tata Steel, Apollo Hospitals and Axis Bank -- quoting between 0.5 per cent and 1.4 per cent -- were the top blue-chip laggards.

Overall market breadth favoured the bulls, with an advance-decline ratio of 2:1 as 1,806 stocks rose and 910 fell on BSE. 

"The US inflation data tonight will be market moving. A decline in the December inflation reading to 6.5 per cent, as the market expects, can lead to the Fed downshifting its rate hiking with a 25-basis-point hike in February and then pausing. This can trigger a rally in equity markets. On the other hand, if inflation remains high, there can be a market sell-off," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Analysts continue to look out for any change in the current trend of foreign fund outflows on Dalal Street. 

As of Wednesday, foreign institutional investors (FIIs) have net sold Indian shares worth Rs 19,802.5 crore in 14 back-to-back sessions, though domestic institutional investors (DIIs) have made net purchases worth Rs 17,179 crore, according to provisional exchange data. 

"Even though FII selling can have a short-term impact, it is unlikely to last. If incoming economic data turns out to be positive, domestic investors can trump FIIs, the way they did in 2022," said Vijayakumar. 

Global markets

Equities in other Asian markets strengthened, with MSCI's broadest index of Asia Pacific shares outside Japan rising 0.7 per cent to a seven-month peak. Japan's Nikkei 225 was up 0.4 per cent.

S&P 500 futures were flat, suggesting a muted start ahead on Wall Street. On Wednesday, the S&P 500 finished 1.3 per cent higher, the Dow Jones gained 0.8 per cent and the tech stocks-heavy Nasdaq Composite soared 1.8 per cent. 

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