(Reuters) – India’s benchmark indexes are poised to open higher on Thursday, as investors digested domestic inflation data suggesting another rate reduction, while U.S. inflation reading and trade war concerns kept a lid on risk sentiment.
The GIFT Nifty futures were trading at 23,143, as of 08:29 a.m. IST, indicating that the blue-chip Nifty 50 will open above Wednesday’s close of 23,045.25.
Asian markets traded marginally higher, while U.S. equities fell overnight after data signalled that consumer inflation picked up more than expected in January, raising prospects of fewer rate cuts by the Federal Reserve.
The U.S. dollar and Treasury yields rose after the inflation reading. [MKTS/GLOB]
Data showed India’s retail inflation slowed to a five-month low in January as food price inflation eased, boosting the odds of another rate cut to support growth.
While the domestic inflation data released hours before the U.S. inflation print had raised expectations for further monetary easing by India’s central bank, the strong U.S. inflation reading challenges that outlook.
Higher interest rates in the U.S. make emerging markets such as India less attractive for overseas investors.
A sustained bout of foreign outflows from Indian equities amounting to $10.67 billion in 2025 so far and slowing economic and earnings growth have hurt markets.
The benchmark Nifty is down 12.3% from its all-time high levels hit in September. The broader markets have fared worse, with the smallcap index trading about 19% below its record high.
Meanwhile, trade war fears continued to mount after U.S. President Donald Trump said he would impose reciprocal tariffs on every country that charges duties on U.S. imports.
The comments came in as Indian Prime Minister Narendra Modi is due to visit the White House later in the day. The Trump administration has complained that India has high tariffs that lock out U.S. imports.
STOCKS TO WATCH
** India’s RBI lifts ban on private lender Kotak Mahindra Bank issuing credit cards and enrolling clients digitally
** Steelmakers such as Tata Steel and JSW Steel will be in focus after the country’s steel minister says India could impose a temporary tax of 15%-25% on steel from China
** British insurer Prudential is considering listing its Indian joint venture with ICICI Prudential Asset Management
** Natco Pharma posts drop in third-quarter profit
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips)
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