Indian equities are poised for a slightly higher open on Wednesday, buoyed by robust corporate earnings and continued foreign investment inflows. However, elevated global oil prices and a cautious sentiment ahead of crucial U.S. inflation data are expected to temper significant gains.
As of 8:03 a.m. IST, GIFT Nifty futures were trading at 24,553 points, suggesting a positive start for the Nifty 50, which closed at 24,471.7 on Tuesday. Both the Nifty 50 and the BSE Sensex saw declines of 0.5% on Tuesday as investor concerns over rising crude oil prices weighed on markets.
Global oil prices extended their gains, and Wall Street ended lower on Tuesday, reflecting growing pessimism regarding a potential deal to stabilize the Middle East and facilitate the reopening of the Strait of Hormuz. Adding to regional tensions, the United States and Yemen’s Iran-aligned Houthis reported separate attacks on shipping on Tuesday, further dimming prospects for an end to the Iran conflict.
Investors are closely monitoring U.S. consumer and producer inflation data due later this week, as these figures could significantly influence the Federal Reserve’s future interest rate decisions. Weaker-than-expected jobs data released last week had already led investors to scale back expectations for a near-term Fed rate hike. Lower U.S. interest rates typically make emerging markets like India more attractive to foreign investors by weakening the dollar and reducing Treasury yields.
Foreign investors demonstrated their renewed interest in Indian markets, purchasing shares worth 2.59 billion rupees ($27.14 million) on Tuesday, according to provisional data. This marks their ninth session of net buying in the last ten trading days, signaling a return of foreign capital after a period of significant outflows earlier this year.
In corporate news, Tata Group companies are expected to be in focus following an Economic Times report suggesting that Tata Sons Chairman N Chandrasekaran might step down before a shareholder meeting scheduled for August 18. Godrej Consumer Products has appointed Aasif Malbari, its finance chief, as CEO and managing director for a five-year term, following the resignation of Sudhir Sitapati shortly after his reappointment. Meanwhile, Bain Capital-backed non-bank lender Manappuram Finance reported a better-than-expected first-quarter profit, driven by strong loan growth in its core gold-loan segment and a recovery in microfinance loans.
