Lower GIFT Nifty futures and weak global indicators, fueled by uncertainty regarding potential interest rate cuts from the Federal Reserve due to strong non-farm payroll data, suggest a negative beginning for Indian equities on Monday.
However, the sentiment may be buoyed and potential downturns limited by data showing India's industrial production growth at its fastest pace in six months in November.
As investors proceed cautiously, anticipation builds for India's consumer price inflation data, set to be released post-market today. The nation's annual inflation rate moderated to 5.48% in November 2024 from 6.21% in October, remaining close to the central bank's threshold, which is capped at 2 percentage points from the 4% mark. Elevated crude oil prices may pose additional challenges.
Data from the Ministry of Statistics and Programme Implementation indicates that India's industrial production rose by 5.2% year-over-year in November, surpassing October's 3.7% growth and the anticipated 4% increase.
Manufacturing output increased by 5.8% annually compared to a 4.4% rise in October. Similarly, mining sector growth accelerated to 1.9% from 0.9%, and electricity production rose 4.4% from the previous year, up from 2% in October.
The market will also be digesting various quarterly earnings reports. Companies like HCL Technologies, Den Networks, Angel One, and Delta Corp are scheduled to reveal their earnings today.
On Friday, Indian shares fell slightly, extending their losing streak for the third consecutive day, due to concerns over a weakening rupee, rising oil prices, and continued foreign institutional investor outflows amidst global uncertainties.
A positive outlook from TCS sparked strong buying in IT stocks, helping to moderate the overall losses in the broader market.
The benchmark S&P/BSE Sensex declined by 241.30 points, or 0.31%, closing at 77,378.91, while the broader NSE Nifty index decreased by 95 points, or 0.4%, to 23,431.50.
On Friday, U.S. stocks experienced a significant downturn, impacted by widespread selling, as robust non-farm payroll data heightened concerns about the Federal Reserve maintaining current interest rates or decelerating the pace of reductions. Rising bond yields also contributed to the decline.
All major averages closed significantly lower. The Dow ended with a loss of 696.75 points, or 1.63%, at 41,938.45. The S&P 500 fell by 91.21 points, or 1.54%, settling at 5,827.04, while the Nasdaq dropped 317.25 points, or 1.63%, to finish at 19,161.62.
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