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Indian markets ended higher on Tuesday after a two day losing run as investors accumulated IT, finance and energy stocks in the wake of encouraging retail inflation data. Today, markets are likely to get positive start tracking strong global cues. Traders will be taking encouragement with foreign fund inflows as foreign institutional investors (FIIs) net bought shares worth Rs 619.92 crore on December 13, according to the provisional data available on the NSE. Some support will come as the government said an amount of Rs 60.46 crore has been received in tax from entities for transactions in virtual digital assets (VDAs), including cryptocurrencies, since the introduction of TDS provisions in July. Some optimism will come as industry body PHDCCI said India can scale up its merchandise exports to G20 nations to USD 500 billion by 2030 from the current USD 212 billion and significantly reduce trade deficit. Traders may take note of report that India and the United Kingdom (UK) have decided to iron out the differences while keeping both nations’ sensitivities in mind, and agreed to conclude the negotiations towards a free trade agreement (FTA) at the earliest. There will be some buzz in fertilizer industry stocks with report that urea production stood at 187.21 lakh tonnes during April-November period of this fiscal, while imports were at 46.14 lakh tonnes to meet domestic demand. Banking stocks will be in focus as finance minister Nirmala Sitharaman said banks have written off bad loans worth Rs 10,09,511 crore during the last five financial years. She said the non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off. There will be some reaction in livestock industry stocks as the country's livestock industry said India needs to restrict corn exports to curb a rise in domestic prices and to ensure sufficient supplies of the main poultry feed.

The US markets ended higher on Tuesday as US CPI inflation numbers came in lower than expected. Asian markets are trading in green on Wednesday ahead of the US Federal Reserve’s rate action later in the day.

Back home, Indian equity benchmarks ended higher by over half a percent on Tuesday amid largely positive cues from global markets. After the initial uptick, key gauges gradually inched higher as data showed domestic retail inflation fell to an 11-month low of 5.88 per cent in November, below the upper end of RBI's target band of 2-6 per cent for the first time since December 2021. Some support also came as a bill seeking to mandate the use of non-fossil energy sources such as biomass, ethanol and green hydrogen was passed by Parliament. Traders also took note of External Affairs Minister S Jaishankar’s statement that India and the UAE which have inked a landmark trade deal have seen a veritable transformation in their ties which are now beginning to have a broader ripple impact and he emphasized that they want to use this relationship to shape the changing world. Markets continued to trade higher and closed near day’s high points. Traders got support as Finance Minister Nirmala Sitharaman lauded the Indian Rupee and said it has been strong against every currency. She said the Reserve Bank of India (RBI) has used foreign exchange reserves that it has to intervene in the market to make sure that the Dollar-Rupee fluctuation does not go too much. Domestic sentiments remained optimistic as Finance ministry said that steps taken by the government has helped in bringing down the inflation to the RBI's tolerance level of below 6 per cent. The ministry also expressed confidence that prices of cereals, pulses and edible oils will soften further in the coming months. Traders overlooked data released by the Ministry of Statistics and Programme Implementation showing that India's industrial output, as per the Index of Industrial Production (IIP), contracted by 4 percent in October. Finally, the BSE Sensex rose 402.73 points or 0.65% to 62,533.30 and the CNX Nifty was up by 110.85 points or 0.60% to 18,608.00.

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