Indian equity markets maintained a cautious stance for the third consecutive session, closing largely unchanged as investors awaited the release of crucial US inflation data. The Sensex and Nifty traded in a narrow range, reflecting a sense of anticipation ahead of key economic indicators that could influence future interest rate decisions. Despite the subdued performance of the benchmark indices, the IT and auto sectors emerged as bright spots, fueled by positive news and strong sectoral momentum.

Market performance:

The Sensex ended the day with a marginal gain of 16 points, or 0.02%, at 81,526, while the Nifty edged higher by 32 points, or 0.1%, to close at 24,642. Market breadth remained positive, with 2,053 shares advancing and 1,772 shares declining.

Sectoral performance:

• IT Sector Maintains Momentum: The IT index continued its upward trajectory, gaining 0.3% on the back of strong performances from Infosys and LTIMindtree. Infosys shares rose nearly 1% after its joint venture, Infosys Compaz, expanded its collaboration with Singapore-based StarHub.
• Auto Sector Accelerates: The Nifty Auto index climbed 0.4%, driven by gains in Maruti Suzuki, Hero MotoCorp, and M&M. Jefferies' positive outlook on M&M, identifying it as a top pick in the sector, contributed to the bullish sentiment.
• FMCG Shows Resilience: The Nifty FMCG index also gained 0.4%, led by Britannia, Marico, and Nestle.
• Cement Stocks Gain Traction: Cement stocks witnessed renewed interest as dealers raised prices for the first time in several months, citing increased demand from the real estate and infrastructure sectors.
• Railway Stocks on Track: Railway stocks continued their recovery from November lows, with BEML, IRCON International, IRFC, and Rail Vikas gaining between 2-5%.
• Energy Sector Lags: The energy sector remained subdued, with the Nifty Energy index declining.

Key market movers:

• Infosys: Shares of Infosys gained nearly 1% on news of its joint venture's expanded collaboration with StarHub.
• M&M: Jefferies' positive outlook on M&M boosted investor confidence, contributing to its strong performance.
• Avenue Supermarts: Shares of Avenue Supermarts (DMart) dropped 3% after Goldman Sachs lowered its target price, citing competitive pressures.
• Swiggy: Swiggy shares declined 3% amid concerns about competition and the end of the anchor lock-in period.

Market outlook:

Analysts anticipate that market sentiment will remain cautious until the release of US and India inflation data. Positive inflation figures could lead to a rate cut by the US Federal Reserve, potentially propelling the Nifty above the 25,000 mark. However, negative data or a lack of a rate cut could trigger a correction.

The Indian stock market's muted performance reflects a wait-and-see approach by investors as they await key economic data. While the IT and auto sectors provided a positive impetus, concerns about inflation and global economic uncertainties continue to weigh on market sentiment. The upcoming inflation figures and central bank decisions will be crucial in shaping market direction in the near term.

DISCLIMER: Prameya or Prameya News7 does not endorse the views or recommendations expressed by experts/brokerages in this article. These are solely their opinions. Readers are advised to consult with a qualified financial advisor before making any investment or trading choices.

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