Indian stock market indices opened slightly lower on Friday, attributed largely to higher-than-expected inflation figures in the United States, leading to weak market cues.
As of 9:21 am, the Sensex stood at 74,859.00 points, showing a decline of 179.15 points or 0.24 percent, while the Nifty was at 22,701.80 points, down by 52.00 points or 0.23 per cent. According to data from the National Stock Exchange (NSE), among the Nifty 50 stocks, 15 advanced, 34 declined, and one remained unchanged.
On Wednesday, the latest data from the US indicated a higher-than-expected increase in inflation for March, dampening hopes for an imminent interest rate cut. In the twelve months leading to March, inflation surged by 3.5 percent year-on-year, marking the highest level in about six months following a 3.2 percent rise in February.
Indian stock exchanges remained closed on Thursday due to Eid, with the next upcoming holidays on April 17 and May 1 for Shri Ram Navami and Maharashtra Day, respectively. The benchmark indices Sensex and Nifty had recorded gains of around 0.5 percent each on Wednesday.
Looking ahead, investors are eagerly anticipating India’s retail inflation data for March, scheduled for release later today, to gain fresh insights into market trends. Although retail inflation in India currently falls within the Reserve Bank of India’s comfort level of two to six per epercentnt, it remains above the ideal four percent scenario, standing at 5.09 percent in February.
The continuous influx of funds from foreign portfolio investors (FPIs) has also provided significant support to Indian stock markets. FPIs turned net buyers for the second consecutive month in March, with the latest data from the National Securities Depository Limited (NSDL) showing purchases of stocks worth Rs 35,098 crore. In April so far, FPIs have bought stocks worth Rs 10,117 crore, as per NSDL data.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the situation, stating that while the rise in US inflation is negative for FPI inflows, the Indian market remains resilient. He advised investors to utilize market dips to invest in high-quality large caps, emphasizing the market’s strength and potential opportunities.
The persistent issue of sticky US inflation is viewed negatively from a global equity market perspective, as it diminishes expectations of multiple rate cuts by the US.