Indian shares set to open higher on easing domestic inflation, Fed pause hopes
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Indian shares are set to open slightly higher on Tuesday on improved sentiment after data showed domestic retail inflation cooled to a more than two-year low in May, while investors awaited U.S. inflation data and Federal Reserve's rate decision.
India's NSE stock futures listed on the Singapore Exchange were up 0.27% at 18,749.50, as of 8:05 a.m. IST.
Wall Street equities closed higher on Monday, aiding risk sentiment ahead of U.S. inflation data on Tuesday and the Fed's policy decision on Wednesday. The odds of a rate pause stood at 80.4%. [FEDWATCH]
Asian markets edged higher [MKTS/GLOB], while oil prices recovered some ground after a slide on Monday on global demand concerns. [O/R]
India's annual inflation eased to a more than two-year low of 4.25% in May, aided by a further fall in food inflation. Industrial output rose 4.2% year-on-year in April, above the estimated 1.8% expansion.
Economists said cooling inflation and rising production vindicated the central bank's decision to hold rates as well as the monetary policy stance.
Indian shares rose on Monday, ahead of the release of the macroeconomic data. Both the Nifty 50 and Sensex were 2% below all-time high levels. Analysts expected markets to witness consolidation ahead of key central bank decisions from Bank of Japan and European Central Bank, besides the Fed.
Foreign institutional investors sold 6.27 billion rupees ($76 million) worth of Indian equities on a net basis on Monday, while domestic investors bought 17.94 billion rupees of shares, as per provisional NSE data.
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($1 = 82.3853 Indian Rupees)
