Key benchmark indices ended at record closing high on Tuesday, but gains were limited as surge in domestic inflation numbers dashed hopes of further monetary easing by the central bank. The broader market, however, ended firm amid positive global cues.

The barometer BSE S&P Sensex rose 92.94 points or 0.22% to 41,952.63, its record closing high. The index hit a record high of 41,994.26 in intraday today.

The Nifty 50 index gained 32.75 points or 0.27% to 12,362.30, its record closing high. The index hit a record high of 12,374.25 in intraday today.

In the broader market, the BSE Mid-Cap index rose 0.75% and the BSE Small-Cap index rose 0.71%. Both these indices outperformed the Sensex.

The market breadth was positive. On the BSE, 1468 shares rose and 1037 shares fell. A total of 154 shares were unchanged.

Economy:

India's inflation, based on monthly Wholesale Price Index (WPI), increased by 2.59% year-on-year in December 2019, accelerating from 0.58% in November and 3.46% in December 2018. It was the highest wholesale inflation rate since May 2019, amid a faster rise in cost of vegetables, while crude oil prices remained firm.

Meanwhile, the all-India general CPI inflation jumped to 7.35% in December 2019, compared with 5.54% in November 2019. The inflation accelerated for the fifth straight month, remaining the highest rate since July 2016. Main upward pressure came from cost of food and beverages (12.16%), namely cereals (4.36%), milk (4.22%), vegetables (60.5%), fruits (4.55%) and pulses (15.44%). The food price index alone jumped to 14.12%, the highest since November 2013.

The corresponding provisional inflation rate for rural area was 7.26% and urban area 7.46% in December 2019 as against 5.27% and 5.76% in November 2019.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.658% at 16:45 IST compared with 6.592% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 70.895, compared with its close of 70.8650 during the previous trading session.

In the commodities market, Brent crude for March 2020 settlement rose 36 cents to $64.56 a barrel. The contract fell 78 cents or 1.20% to settle at $64.20 a barrel during the previous trading session.

Foreign Market:

Most shares in Europe and Asia edged higher on Tuesday as investors await China's trade data ahead of a long-anticipated phase one deal signing with the US on Wednesday, 15 January. Optimism also rose as the US removed China from a list of currency manipulators.

China's trade surplus with the United States narrowed last year, official data showed Tuesday. China's surplus came in at around $295.8 billion in 2019, down 8.5% from the previous year's record $323.3 billion, according to customs data. In December, its surplus with the US was around $23.2 billion, down from $24.6 billion the month before.

Back in Europe, the UK economy unexpectedly shrank in the month before the general election, contracting by 0.3%. The Office for National Statistics (ONS) said on Monday that the month-on-month decline in GDP — the sharpest in seven months — was driven by falls in both the services and production sectors. Compared to the same month in 2018, the UK economy grew by 0.6% in November, the slowest growth since the spring of 2012, the ONS noted.

In US, the S&P 500 and Nasdaq hit all-time high on Monday, as investors awaited the planned signing of a “phase one” US-China trade deal on 15 January 2020 and prepared for fourth-quarter earnings season to move into full swing.

The U.S. Treasury Department on Monday dropped its designation of China as a currency manipulator, an apparent gesture of good will as a Chinese delegation led by Vice Premier Liu He arrived ahead of the signing of the partial trade accord. The deal comes after more than 18 months of tit-for-tat tariff hikes between the world's two largest economies.

Buzzing Indian Index:

The Nifty FMCG index rose 1.41% to Rs 31,145.40. The index has risen 4.52% in six sessions.

Tata Global Beverages (up 10.34%), Britannia Industries (up 2.44%), Colgate Palmolive (India) (up 1.78%), Nestle India (up 1.32%), GlaxoSmithKline Consumer Healthcare (up 1.06%), Godrej Consumer Products (up 1.06%), Dabur India (up 0.78%), Hindustan Unilever (up 0.71%), Bajaj Consumer (up 0.67%), Marico (up 0.47%) and Procter & Gamble Hygiene and Health Care (up 0.41%) advanced.

Trending Stocks:

Wipro rose 0.88%. On a consolidated basis, the IT major reported 3.79% decline in net profit to Rs 2,455.90 crore on 2.28% increase in revenue to Rs 15,470.50 crore in Q3 December 2019 over Q2 September 2019.

IT services segment revenue rose 3.03% to Rs 15,100.60 crore crore in Q3 December 2019 over Q2 September 2019.

In dollar terms, IT services segment revenue was at $2,094.8 million, a sequential growth of 2.2%.

The company expects revenue from IT services business to be in the range of $2,095 million to $2,137 million. This translates to a sequential growth of 0.0% to 2.0%.

Abidali Z. Neemuchwala, CEO and managing director said, “We have delivered a good quarter with secular growth across all business units, geographies and practices. We remain focused on deepening our customer relationships, converting our funnel and winning large deals.”

Jatin Dalal, chief financial officer said, “We expanded operating margins by 0.3% aided by a favorable movement in the currency. Further, we generated strong operating cash flows led by disciplined execution at 124% of our net income.”

Indusind Bank fell 3.85%. The private bank on Tuesday said its net profit rose 32% Rs 1300.20 crore in Q3 December 2019 from Rs 985.03 crore in Q3 December 2018. The bank's net interest income jumped 34.35% year-on-year (YoY) to Rs 3074 crore in Q3 December 2019.

The ratio of gross NPAs to gross advances stood at 2.18% as on 31 December 2019 as against 2.19% as on 30 September 2019 and 1.13% as on 31 December 2018. The ratio of net NPAs to net advances stood at 1.05% as on 31 December 2019 as against 1.12% as on 30 September 2019 and 0.59% as on 31 December 2018.

Bandhan Bank rose 1.03%. The bank on Tuesday said it recorded 120% jump in net profit to Rs 731.03 crore in Q3 December 2019 over Q3 December 2018. Net Interest Income (NII) grew 37.10% to Rs 1,541 crore during the period under review. The numbers cannot be compared as the Q3 results include figures of Gruh Finance, which merged with the bank on 17 October 2019.

The ratio of gross NPAs to gross advances stood at 1.93% as on 31 December 2019 as against 1.76% as on 30 September 2019 and 2.41% as on 31 December 2018. The ratio of net NPAs to net advances stood at 0.81% as on 31 December 2019 as against 0.56% as on 30 September 2019 and 0.7% as on 31 December 2018.

TV18 Broadcast rose 14.89%. On a consolidated basis, the company's net profit fell 9.4% to Rs 121.93 crore while revenue from operations slipped 3.3% to Rs 1,425.37 crore in Q3 December 2019 over Q3 December 2018. Consolidated operating EBITDA soared 145% to Rs 281 crore in Q3 December 2019 compared with Rs 115 crore in Q3 December 2018.

Delta Corp fell 3.48%. The casino operator reported a consolidated net profit of Rs 55.07 crore in Q3 December 2019, up 9% from Rs 50.53 crore in Q3 December 2018. Net sales, however, remained flat at Rs 205.13 crore in Q3 December 2019 as compared to Rs 205.15 crore in Q3 December 2018.

While revenues from the casino gaming division declined by 3.41% to Rs 195.23 crore, those from the online skill gaming division increased 8.74% to Rs 40.29 crore and the hospitality division rose 2.63% to Rs 19.89 crore in Q3 December 2019 over Q3 December 2018.

IRCTC gained 3.81% to Rs 974.70. The Ministry of Railways has given its approval to IRCTC to operate 82901/82902 Ahmedabad-Mumbai Central Tejas Express for six days a week. This train will have its inaugural run on 17 January 2020 and will start its commercial run from 19 January 2020.

Deepak Fertilisers & Petrochemicals jumped 5.02% to Rs 115.15 after the firm divested one of its plots of industrial land in Dahej, Gujarat for Rs 99.20 crore. It is part of its strategy to divest non-core assets.

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