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Indian markets ended flat on Monday amid a weak trend in global markets and continuous foreign fund outflows. Today, start of the session is likely to be optimistic tracking positive cues from global markets. Investors will also cheer on India’s November CPI numbers. Retail inflation fell to an 11-month low of 5.88 per cent in November, mainly due to softening prices of food items, official data showed on Monday. This is the first time in 11 months that the retail inflation print has come within the RBI's tolerance band of 4 (+/- 2) per cent. Some support will come 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 may take 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. However, traders may be concerned as India's industrial output, as per the Index of Industrial Production (IIP), crashed by 4 percent in October, data released by the Ministry of Statistics and Programme Implementation showed. Some cautiousness may come foreign institutional investors (FIIs) sold shares worth Rs 138.81 crore on December 12, as per provisional data available on the NSE. There will be some buzz in gems and jewelry industry stocks as the Gem and Jewellery Export Promotion Council (GJEPC) said the gems and jewellery exports grew 11.83 per cent to Rs 19,855.17 crore (USD 2,429.86 million) in November compared to the year-ago period on the back of resumption of manufacturing activities after Diwali. Power stocks will be in focus as Icra said the all-India electricity demand is expected to grow 7 per cent to 1,480 billion units (BU) in the ongoing financial year. In the preceding 2021-22 fiscal, the all-India power demand was at 1,380 BU. There will be some reaction in aviation industry stocks as the rating firm ICRA said amid recovery in domestic passenger traffic in FY2023, the earnings recovery for domestic airlines will be slow-paced due to elevated ATF prices in addition to the rupee depreciation against the US dollar. Leather and footwear related stocks will be limelight with a report that Indian footwear and leather exports to West Asia and North Africa (WANA) region have registered an exponential growth of 20 per cent in the first half of 2022. Shares of Tata Steel, JSW Steel, JSPL and SAIL will be tracked after the companies qualified under the PLI scheme for specialty steel. Meanwhile, Landmarks Cars IPO opens for subscription today.

The US markets ended higher on Monday, lifted in part by gains in Microsoft and Pfizer, as investors girded for inflation data on Tuesday and a policy announcement from the Federal Reserve later in the week. Asian markets are trading mostly in green on Tuesday by overnight optimism on Wall Street.

Back home, Indian equity benchmarks settled flat on Monday as traders remained on sidelines ahead of the country’s November retail inflation data, October’s industrial production (IIP) data to be released later in the day. Benchmarks made negative start amid a weak trend in global markets and continuous foreign fund outflows. Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Friday as they offloaded shares worth Rs 158.01 crore, according to exchange data. But, key indices quickly pared initial losses to trade flat with positive bias as traders took some support with the Reserve Bank of India's (RBI) statistical supplement showing that India's foreign exchange reserves rose for a fourth week to an over three-month high of $561.16 billion in the week through December 2. Traders also took a note of report that the government has asked trade bodies and banks to explore opportunities for trade in rupee with more countries after having facilitated rupee trade with Russia, Mauritius and Sri Lanka. But, buying proved short-lived as markets once again slipped into red in late afternoon session amid a private report stating that foreign portfolio investors (FPIs) turned sellers in the last four trading sessions and pulled out Rs 3,300 crore as they are adopting a cautious stance ahead of the US Federal Reserve's decision on the interest rate. Some concern also came with the data provided by commerce and industry minister Piyush Goyal showing that the trade deficit, difference between import and exports, between India and China has touched $51.5 billion during April-October this fiscal. Though, markets managed to trim losses towards the end, taking support from the Finance Ministry’s statement that the net direct tax collection grew 24 per cent to Rs 8.77 lakh crore in the April-November of the current fiscal. This represents 61.79 per cent of the full-year Budget Estimates (BE) of direct tax collection for 2022-23 (April-March). Finally, the BSE Sensex fell 51.10 points or 0.08% to 62,130.57 and the CNX Nifty was up by 0.55 points to 18,497.15.

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