6 months ago
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Indian benchmark equity indices opened lower on Friday as the release of high U.S. inflation data diminished hopes of imminent Federal Reserve rate cuts. Investors are now turning their focus to the domestic earnings season, with TCS scheduled to report later in the day.
The BSE Sensex was trading 304 points or 0.40% lower at 74,734. Nifty50 was trading at 22,672, down 82 points or 0.36% at around 9.16 am.
The U.S. consumer price index rose 0.4% last month, in line with February, the Labor Department's Bureau of Labor Statistics (BLS) said. This put the year-on-year increase at 3.5%. Both month-on-month and year-on-year readings beat Reuters poll estimates.
In the Sensex pack, Sun Pharma, JSW Steel, and Asian Paints fell 1-2% in early trade. Meanwhile, Kotak Bank, HDFC Bank, Tata Steel, and Maruti also opened lower. On the other hand, NTPC, L&T, and Tata Motors opened with gains.
Computer Age Management Services (CAMS) shares jumped over 5% in early trade after the Reserve Bank of India (RBI) granted authorisation to the company to operate as an online payment aggregator.
Metropolis Healthcare shares rose nearly 8% after the company said it saw a 10% year-on-year revenue growth in the March quarter.
On the sectoral front, Nifty Pharma experienced a 0.6% decline, and Nifty Financial Services fell by 0.3%. Additionally, Nifty FMCG, Metal, Healthcare, and Oil & Gas sectors also witnessed declines. In the broader market, Nifty Smallcap100 saw a rise of 0.46%, while Nifty Midcap100 surged by 0.3%.
Experts Take
"The hotter-than-expected US inflation has spiked the US bond yields. This is negative for FPI inflows but is unlikely to impact the Indian market which is resilient, and the rally is driven mainly by domestic liquidity. Dips are likely to get bought imparting strength to the market. Therefore, investors may use the dips to buy high quality largecaps where the margin of safety is high," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Mandar Bhojane of Choice Broking, said, "Nifty is trading near its all-time high, and both the daily and hourly momentum indicators have shown a positive crossover, signaling a buying opportunity. Regarding resistance levels, the immediate hurdle is at 22,800, with further potential upside momentum likely towards 23,000. On the downside, support is observed at 22,650–22,600."
Global Markets
Asian equities were in a subdued mood on Friday as investors pondered the path for Federal Reserve interest rate cuts amid a murky U.S. inflation outlook.
The worst losses were in Hong Kong, with the Hang Seng sliding 1.31% as property shares weighed. Mainland China's blue chips were flat.
Markets, which had expected a rate cut in June, are now pricing in a pause in both June and July policy meetings, according to the CMEGroup's FedWatch Tool.
U.S. Treasury yields
Long-term U.S. Treasury yields stood at 4.5641% in Asian trading, staying close to the overnight high of 4.5680%, a level last seen on Nov. 14.
Crude Oil
Oil prices rose in early trade on Friday on heightened tensions in the Middle East, where Iran has promised to retaliate for a suspected Israeli air strike on its embassy in Syria, which could risk disruptions to supply from the oil producing region.
Brent crude futures climbed 55 cents, or 0.61%, to $90.29 a barrel, while U.S. West Texas Intermediate crude futures rose 64 cents, or 0.75%, to $85.66.
Currency Watch
The Indian rupee fell 5 paise to 83.36 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, surged 0.07% to 105.35 level.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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