Indian markets experienced a volatile session on Tuesday, ending flat as investors balanced selective buying and selling in heavyweight stocks. Today, markets are anticipated to open cautiously, influenced by global weakness ahead of key US inflation data, which could provide insights into the Federal Reserve's upcoming policy decisions.

Early Wednesday, oil prices inched up, fueled by expectations of rising demand in China due to its newly announced looser monetary policies aimed at boosting economic growth. However, positive sentiment might emerge from S&P Global Ratings' latest India Outlook, which forecasts resilient economic growth of 6.8% for FY25, driven by urban consumption, a robust services sector, and infrastructure investments.

The Securities and Exchange Board of India (SEBI) announced that the top 500 stocks will transition to a T+0 settlement cycle in phases starting January 31, 2025. Meanwhile, insurance stocks may face pressure as non-life insurers recorded a tepid 4.4% year-on-year growth in November premiums, and life insurance new business premiums dipped by 4.5% YoY.

Banking stocks could remain in focus as Fitch highlighted intensifying asset quality pressures in emerging markets like India due to rapid credit growth, but robust economic conditions and lower interest rates are expected to bolster near-term performance. Additionally, battery stocks might react positively to projections of a nearly threefold increase in battery electric vehicle (BEV) production in CY2025, following subdued demand in CY2024.

Auto stocks could garner attention after Union Minister Nitin Gadkari expressed confidence in India's automobile sector achieving global leadership within five years. He also announced plans to reduce logistics costs to 9% within two years.

In international markets, US indices closed lower on Tuesday ahead of inflation data, while Asian markets traded mixed on Wednesday amid policy anticipation in China.

Back in India, benchmarks ended Tuesday’s session flat after initial gains faded. Traders found support in reports predicting a drop in retail inflation to 5.53% for November, aided by easing vegetable prices and labor ministry data showing reduced inflation for farm and rural workers in October. However, profit-booking and GST fraud concerns weighed on sentiment later in the session. Final-hour buying in IT and Realty stocks helped the indices recover.

In sectoral news, entertainment and media stocks gained traction as a private report forecasted an 8.3% annual growth for the industry to reach ₹3.65 lakh crore by 2025. Auto sector stocks also benefited from an 11.21% rise in retail vehicle sales in November 2024 compared to the previous year.

On Tuesday, the BSE Sensex edged up by 1.59 points to 81,510.05, while the CNX Nifty slipped by 8.95 points to 24,610.05.