• The Indian stock market ended lower on Thursday, ahead of the release of the Consumer Price Index (CPI) data.
• Despite expectations of a drop in inflation, investors are closely watching vegetable prices.
• The Nifty IT index reached a new high following the release of US inflation data.
• The market's performance was influenced by anticipation of CPI data, a weakening rupee, and global economic uncertainties.

The Indian stock market concluded its trading day on a lower note on Thursday, with the Sensex settling at 81,289.96, a drop of 236.18 points or 0.29 per cent. The Nifty also ended the day on a downswing, closing at 24,548.70, a decrease of 93.10 points or 0.38 per cent. This downward trend was observed ahead of the release of the Consumer Price Index (CPI) data, with significant selling pressure witnessed in the media and Fast-Moving Consumer Goods (FMCG) sectors.

Market experts have noted that the market remained range-bound in anticipation of the domestic CPI data and a weakening rupee. Despite expectations of a drop in inflation, investors are keeping a close watch on vegetable prices, which are expected to influence future rate trajectories.

The Nifty IT index, however, reached a new high following the release of US inflation data that met expectations, thereby raising hopes for a rate cut by the Federal Reserve in the following week.

Market Performance and Key Players

The Nifty Bank ended the day at 53,216.45, down by 174.90 points or 0.33 per cent. The Nifty Midcap 100 index closed at 59,021.70, falling 271.25 points or 0.46 per cent, while the Nifty Smallcap 100 index closed at 19,466.55, dropping 190.80 points or 0.97 per cent.

On the Bombay Stock Exchange (BSE), 1,491 shares ended in green, 2,508 in red, with no change in 106 shares. Among the Sensex pack, NTPC, Hindustan Unilever, Tata Motors, Maruti, L&T, Reliance, Asian Paints, SBI, Kotak Mahindra Bank, ITC, Nestle India, and Titan were the top losers. On the other hand, Bharti Airtel, IndusInd Bank, Tech Mahindra, Infosys, Adani Ports, TCS, Power Grid, JSW Steel, HCL Tech, ICICI Bank, and Bajaj Finance emerged as the top gainers.

The Indian rupee closed stable at 84.86 per dollar on Thursday, marginally higher than the previous closing level of 84.84. This stability in the rupee comes amidst a backdrop of foreign fund outflows and a weakening rupee, which have impacted investor sentiment.

Inflation Concerns and Q2 Earnings

The market's cautious approach is also attributed to the announcement of inflation and Index of Industrial Production (IIP) data. Global uncertainty, rising US bond yields fuelling fund outflows, and persisting conflicts in the Middle East and West Asia have also contributed to the lack of confidence among investors.

India's retail inflation stood at 6.21 per cent in October, breaching the Reserve Bank of India's 6 per cent upper tolerance level. Since August, when retail inflation was at its second-lowest in the last five years at 3.65 per cent, it has been on the rise. Food prices continue to be a concern for policymakers in India, who aim to bring retail inflation down to 4 per cent on a sustainable basis.

The Q2 earnings season is in full swing, with major companies across sectors, including IT services giants, having released their Q2 results. Companies like Larsen & Toubro, The Tata Power Company, Dabur India, Aditya Birla Capital, Procter and Gamble Hygiene and Health Care, Biocon, TTK Prestige, TCI Express, IRB Infrastructure Developers, Vardhman Textiles, among others, are lined up to release their Q2 earnings report.