Deepak Jasani, Head of Retail Research, HDFC Securities
Indian markets could open flat, in line with mixed Asian markets today and despite lower US markets on Sept 12
U.S. stocks closed lower Tuesday, a day that saw Apple unveil its iPhone 15 at an annual marketing event, and raise its price on iPhone Pro Max for the first time. Investors were also looking ahead to an August inflation from the consumer-price index on Wednesday.
Apple Inc., which unveiled the iPhone 15 and other products, dropped almost 2%. Its launches are famous “sell-the-news” events. Oracle Corp. sank the most since 2002 after a slowdown in cloud sales.
Economists polled by the Wall Street Journal have forecast that core CPI increased 0.2% last month and 4.3% year over year. Core inflation had climbed 4.7% in the 12 months through July, as measured by the consumer-price index.
Interest rate traders see a 93% chance of rates remaining at the current levels in September but just a 56% likelihood of a pause at the November meeting, according to the CME FedWatch Tool.
Oil traded near a 10-month high amid strains in global supplies. U.S. crude rose 1.78% to settle at $88.84 per barrel, while Brent settled at $92.06, up 1.57% on the day.
India’s industrial output grew by 5.7 percent in July. At 5.7 percent, the latest industrial growth figure as per the Index of Industrial Production (IIP) is at a five-month high. It is also above the consensus estimate of 5 percent. Industrial growth had come in at 3.7 percent in June – now revised to 3.8 percent – and was 2.2 percent in July 2022.
The Consumer Price Index-based inflation stood at 6.83% in August, as compared with 7.44% in July. The July figures were the highest in 15 months. A panel of economists polled by Bloomberg had estimated a reading of 7.1% for August.
Asian shares were subdued Wednesday after Wall Street wobbled overnight with markets bracing for key U.S. inflation data on Wednesday, while an oil price spike stoked anxiety about persistent price pressures, complicating the interest rate outlook.
Nifty swung between gains and losses on Sept 12 after scaling a fresh all-time at 20,110.35 in early trade. At close, Nifty was almost unchanged, falling 0.02% or 3.2 points at 19993.2. Nifty closed almost flat after opening higher on the 8th day of rise. Broad market sell-off has dented sentiments to some extent. While Nifty may not fall much in the near term, the broad market indices may take time to find a bottom. Nifty could remain in the 20110-19865 band for the near term.