Cooling US Inflation Lifts Sentiment; GIFT Nifty Signals Firm Start for Indian Markets

On December 19, Indian equity benchmarks are expected to start the day positively, thus ending a losing streak that lasted four sessions, since the decrease in US inflation has increased the global risk appetite.

The early signs were positive, with GIFT Nifty at 25,948 around 7:40 am, which was 71 points or 0.27 percent higher, suggesting a better opening for Nifty and Sensex.

Beyond the headline indices, capital market stocks are expected to remain in focus. ICICI Prudential AMC is set to debut on Dalal Street today, while the Securities and Exchange Board of India’s (SEBI) move to rationalise mutual fund expense ratios has lifted sentiment across the asset management and broking space. On Thursday, capital market stocks rallied after SEBI’s changes turned out to be less stringent than feared.

Global cues support optimism

The strong US market rebound took place overnight, as investors regarding inflation cooling signs and thus their worries about the interest rate outlook easing. The Nasdaq Composite was the strongest among the indices, posting a rise of 1.4 percent, the main reason being the sharp 10 percent jump of Micron shares after strong earnings. The S&P 500 went up by around 0.8 percent and the Dow Jones Industrial Average by nearly 0.2 percent.

Asian markets reacted to Wall Street's performance in early trading. Market indexes like Japan's Nikkei 225 and South Korea's Kospi were slightly up and the Fed rate cut speculations gave support for the increase. Nevertheless, the rise was not significant as investors stayed careful before the Bank of Japan's monetary policy announcement.

To Keep an Eye on Future Developments

Moreover, investors are monitoring Japan's increasing interest in Indian financial firms. Mitsubishi UFJ Financial Group (MUFG) is said to be preparing a strategic investment of $4.45 billion to acquire a 20 percent stake in Shriram Finance, which might eventually lead to a total takeover.

In the corporate sector, Accenture disclosed the first quarter of FY26 revenue of $18.7 billion, which means a 6 percent rise in dollar way and 5 percent growth in local cash currency. This performance could be suggesting the positive inference for Indian IT services stocks.

Meanwhile, in the US, President Donald Trump has signed into law a defence policy bill worth nearly $1 trillion annually, despite provisions extending support to Ukraine and limiting flexibility on scaling back defence commitments in Europe.

Derivatives outlook

Derivatives data suggests a well-defined trading range for the Nifty. The 25,900 mark was heavily called and 25,700 strongly put, which gave a strong indication of a consolidation. An unbroken move over 25,900 could bring back bullish spirits, but resistance that is met repeatedly may keep the index within a certain range.

India VIX, which is a measure of volatility, is still at a low level because it went down by 1.32 percent to 9.70, which means that the market is going to be quite stable in the short term.

Disclaimer: The market experts' opinions and investment recommendations are strictly personal views. It is advisable for investors to consult experienced professionals prior to any investment decisions.