Sensex, Nifty open marginally higher tracking positive cues from global peers

Domestic headline equity indices Sensex and Nifty opened marginally higher on Wednesday, tracking global peers, after softer U.S. producer prices data reinforced bets of an interest rate cut by the Federal Reserve in September.

The BSE Sensex was trading 88 points, or 0.11%, higher at 79,042. The Nifty50 was up 27 points, or 0.11%, trading at 24,166 around 9:12 am.

U.S. producer prices increased less than expected in July as the cost of services fell by the most in nearly 1-1/2 years amid signs of diminishing pricing power for businesses, evidence of waning inflation pressures that reinforced hopes of an interest rate cut next month.


Traders see about a 53% chance of a 50-basis-point Fed rate cut in September, rising from 50% a day before, according to CME FedWatch Tool.

The U.S. consumer price data for July, due after Indian market hours, is the next major data point that investors will closely watch.

From Sensex stocks, HCL Tech, M&M, Tata Motors, SBI, Tech Mahindra, and Bharti Airtel opened with gains, while UltraTech Cement, ICICI Bank, Adani Ports, Nestle, and Axis Bank opened with cuts.

Sector-wise, Nifty IT rose 0.6% after favorable U.S. producer price data. Nifty Auto, Consumer Durables, and Oil & Gas also surged, while Bank, Financial Services, FMCG, Pharma, and Realty sectors declined.

Among individual stocks, Nykaa rose 6% in early trade after the company's consolidated net profit jumped 152% year-on-year to Rs 13.6 core in Q1 FY25.

Piramal Enterprises shares fell over 7% after the company reported a 64% YoY decline in its June quarter net profit to Rs 181 crore.

Experts View
"The PPI inflation numbers from the US indicate softening of inflation, and a confirmation of this declining trend is likely from the CPI numbers coming today. The US market moved up yesterday in anticipation of this and a rate cut by the Fed in September. If the rate cut is by 50bp, the US market will remain resilient lending support to global markets. This is the likely scenario. On the other hand, if the Fed disappoints with no rate cut, the market will sell off and this will have repercussions globally," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"In India the pattern of FII selling on valuation concerns and DII buying supported by money flows continues. Some segments like defence related stocks which have run far ahead of fundamentals are witnessing corrections. Financials continue to be under pressure on concerns arising from rising costs of deposits. For long- term investors, quality banking stocks offer value," Vijayakumar said.

Hardik Matalia, Research Analyst at Choice Broking, said, "After a flat to positive opening, Nifty can find support at 24,050 followed by 24,100 and 23,950. On the higher side, 24,300 can be an immediate resistance, followed by 24,400 and 24,450."

Global Markets
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.5%. Hong Kong's Hang Seng, however, slipped 0.4%, and mainland blue chips lost 0.6%.

U.S. equity futures were flat after a strong rebound on Wall Street overnight as data showed U.S. producer prices rose by less than expected in July, suggesting inflation continued to moderate.

FII/DII Tracker
The foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 2,107 crore on August 13, while domestic institutional investors bought equities worth Rs 1,239 crore on the same day.

Crude Oil
Oil prices climbed on Wednesday on estimates about shrinking U.S. crude and gasoline inventories as the market watched for a possible widening of the Middle Eastern war, which could curtail global oil supplies.

Brent crude futures rose 51 cents to $81.2 a barrel by 9:45 am IST. U.S. West Texas Intermediate crude increased by 56 cents to $78.91 per barrel.

Currency Watch
The Indian rupee rose 7 paise to 83.90 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.09% to 102.65 level.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)