Stocks may open on firm note

GIFT Nifty:

Trading of Nifty 50 index futures on the GIFT Nifty indicates that the Nifty could rise 38 points at the opening bell.

India`s retail inflation, based on Consumer Price Index Numbers, eased to a three-month low of 5.10% in January 2024 against 5.69% during the previous month, the latest data released by the Ministry of Statistics & Programme Implementation showed on Monday. India`s factory output, meanwhile, grew 3.8% in December 2023, the data showed. The IIP in November 2023 stood at 2.4%, while during the year-ago period, the factory output stood at 5.1%.

Global markets:

Overseas, Asia-Pacific markets are trading higher on Tuesday ahead of a key U.S. inflation report that could help shape the Federal Reserve`s rates outlook and determine the timing of interest rate cuts. Markets are closed in China, Hong Kong, Taiwan and Vietnam for Lunar New Year holidays.

U.S. indices ended on a mixed note on Monday after hitting new highs ahead of data expected to underscore further disinflation, paving the way for the Federal Reserve to start cutting interest rates this year.

Domestic markets:

Back home, the stock market dropped sharply on Monday as benchmark indices closed below key levels. Initial optimism gave way to rampant selling, primarily driven by a surge in exchange margin requirements, particularly impacting mid and small cap positions. The S&P BSE Sensex plummeted by 523 points (0.73%) to reach 71,072.49, while the Nifty 50 index experienced a decline of 166.45 points (0.76%), closing at 21,616.05.

Foreign portfolio investors (FPIs) bought shares worth Rs 126.60 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,711.75 crore in the Indian equity market on 12 February, provisional data showed.

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