Nifty closes 0.84% higher, cooling off from intraday highs

The Nifty 50 closed 0.84% higher on Wednesday, after initially surging to an intraday peak of 25,424 before cooling off. This marked a retreat from the sharp gains earlier in the day, as data showing hotter-than-anticipated US inflation reignited concerns about the Federal Reserve's potential for aggressive rate hikes later in the year.

Consequently, the Nifty settled at 25,255.05, up 210.40 points or 0.84% for the day. The broader Sensex also gained 0.95%, closing at 81,879.40, but far below the initial surge of 1,300 points. Over the past ten sessions, the Nifty has risen around 11.1%, its ninth consecutive winning day, driven by substantial foreign institutional investment (FII) inflows of roughly ₹54,000 crore in the first nine days of November.

Analysts including Vikram Kasat of PL Capital emphasized that sustained FII inflows, earnings momentum, and stable crude prices would be crucial for the market's next move, advising investors to focus on fundamentally strong companies rather than chasing sharp rallies. Sector-wise, PSU banks, automobile manufacturers, chemicals, and FMCG stocks led the gains, while IT, real estate, and pharmaceuticals faced selling pressure, with Vinod Nair of Geojit Investments attributing this to the rupee's recent appreciation and expectations of prolonged global interest rates.

The broader market showed resilience, with the Nifty Midcap 100 and Smallcap 100 both outperforming, with gains of 0.81% and 1.59%, respectively. Bank Nifty ended the day up 1.76%, closing at 60,792.40 after touching an intraday high of 61,394. Individual stocks also saw varied performances, with Kalyan Jewellers surging 12% on strong quarterly results, despite a one-time property-sale gain inflating its profits.

Cochin Shipyard, however, saw a sharp decline due to thinning margins, following a ₹498.58 crore contract signed with the company for refitting and re-powering the INS Betwa. The Indian rupee strengthened to 93.6 against the US dollar, buoyed by FII inflows and lower crude oil prices, though the dollar's rebound after the Consumer Price Index (CPI) data constrained gains.

The Indian government's forecast for GDP growth in fiscal 2027 rose to 7% from 6.5%, citing robust economic momentum and potential new private capital expenditure. Meanwhile, Brent crude hovered near $92–93 per barrel, while WTI traded at $86–87. The Indian rupee's solid performance was tempered by the Fed's potential for a 25-basis-point rate hike in December, with a 15% probability.

Upcoming economic data releases on Thursday, including India's October CPI inflation, US weekly jobless claims, UK Q3 GDP, and crude oil inventory figures, could provide further insights into the market's direction. Analyst Ajit Mishra from Religare Broking sees a potential buying opportunity in the 24,800–25,000 zone, with a next upside target of 25,500–25,750.