Indian stocks marginally lower Friday, retail inflation data now in focus

New Delhi [India], April 12 (ANI): Indian stock market indices were marginally lower at the opening bell on Friday, largely due to more-than-expected inflation in the US and related weak cues.

At 9.21 am, Sensex was at 74,859.00 points, down 179.15 points or 0.24 per cent, while Nifty was at 22,701.80 points, down 52.00 points or 0.23 per cent. Among the widely-tracked Nifty 50 stocks, 15 advanced, 34 declined, and one was unchanged, NSE data showed.

On Wednesday, the latest data showed inflation in the US increased more than expected in March, putting cold water to hopes of an interest rate cut shortly.

In the 12 months through March, the inflation increased 3.5 per cent year-on-year, the highest in about 6 months. This followed a 3.2 per cent rise in February.

Indian stock exchanges were shut on Thursday for Eid. The next stock market holidays are on April 17 and May 1, for Shri Ram Navami and Maharashtra Day, respectively.

The benchmark indices Sensex and Nifty rose about 0.5 per cent each on Wednesday.

Going ahead, India's retail inflation data for March, which will be released today evening will be keenly watched by investors, for fresh market cues.

Retail inflation in India is at the RBI's two-six per cent comfort level but is above the ideal 4 per cent scenario. In February, it was 5.09 per cent. Inflation has been a concern for many countries, including advanced economies, but India has largely managed to steer its inflation trajectory quite well.

Further, sustained inflows of funds by foreign portfolio investors have also been supporting Indian stock markets.

Foreign portfolio investors (FPIs) have become net buyers for the second month in March in Indian stock markets. They had aggressively sold Indian stocks and turned net sellers in the Indian equity market in January 2024.

The latest data from the National Securities Depository Limited (NSDL) showed that the FPIs bought stocks worth Rs 35,098 crore in March. In February, they bought stocks worth Rs 1,539 crore. So far in April, they bought stocks worth Rs 10,117 crore, NSDL data showed.

"This (rise in US inflation) 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," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"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."

From the global equity market perspective, sticky US inflation is a negative since it has reduced hopes of three rate cuts by the US. (ANI)