Sensex slips below 60k, Nifty hovers near 17,850; investors await inflation data from US and India

Indian equity market opened on a sluggish note on Thursday after ending yesterday’s session with marginal gains. The lackluster performance of the domestic market in the near term can be attributed to FIIs pulling out of the Indian market and chasing lower valuations in other markets.

The BSE Sensex opened above the 60,000-mark but plunged more than half a percentage, while NSE Nifty-50 plunged below the 17,850-mark after opening barely above the 17,900 mark and Nifty bank started trading at 42,238 points but plunged below the 42,000-mark, losing more than half a percent.

As of 1:00 PM, Sensex dropped 207 points or 0.35% to 59,897 points, whereas Nifty is trading down 60 points or 0.35% to 17,837 points and Nifty Bank lost 225 points or 0.5% to 42,007 points

The Foreign institutional investors (FII) net sold shares worth Rs. 13,334 crores since the beginning of the new year till Jan 11th, while domestic institutional investors (DII) bought shares worth a net Rs 8,717.61 crore for the same period.

For a contextual understanding of recent FII outflow, we turn to December data. In December, FIIs sold shares worth a net of Rs 14,231 crore, while DIIs bought shares worth a net of Rs 24,159.13 crore.

In merely 9 trading sessions (from Jan 2nd to Jan 11th), FIIs pulled almost as much money as they pulled out in December 2022.

Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd, said, “There is cautiousness in the market ahead of inflation data of both India and the US which is to be released on Thursday. There is high hope of further cooling down in US inflation which would influence the US Fed’s interest rate decision while the domestic inflation is likely to stay flat. Some of the other key global events like China and UK GDP data and Michigan consumer sentiment would also be keenly eyed.”

Wall Street rallied on Wednesday as investors pin hope on a softer consumer price index (CPI). The Dow Jones Industrial Average gained 268 points or 0.8%, while the S&P 500 added 50 points or 1.28% and Nasdaq closed 189 points or 1.8% higher.

The CPI data of the US, which measures the inflation in the economy, is scheduled to be released today. Wall Street wildly expects inflation to cool off in December. After peaking at 9.1% in June, the CPI rate cooled off to 7.1 % in November and according to various polls, the inflation rate is expected to moderate around 6.5% in December.