Sensex, Nifty Set For Positive Open As Retail Inflation Hits 8-year Low

(RTTNews) - Indian shares look set to open on a positive note Wednesday after official data showed India's consumer price inflation eased more-than-expected in July to the lowest level in just over eight years amid a continued fall in food prices.

Consumer price inflation eased to 1.55 percent in July from 2.10 percent in June. The expected rate was 1.76 percent.

Moreover, this was the lowest inflation rate since June 2017, bringing inflation below RBI's tolerance band and raising prospects of another interest rate cut.

The Reserve Bank of India held rates at 5.5 percent during its policy meeting last week.

Benchmark indexes Sensex and Nifty fell around half a percent each on Tuesday due to ongoing trade concerns and continued foreign fund outflows.

The rupee moved in a tight range before settling 3 paise higher at 87.72 against the dollar.

Foreign Portfolio Investors (FPIs) sold shares worth Rs 3,399 crore on a net basis Tuesday, while domestic institutional investors (DIIs) net bought shares to the tune of Rs 3,508 crore, according to provisional NSE data.

Asian stocks were mostly higher this morning, with Japanese markets leading regional gains. The dollar index was little changed after falling in the prior session.

Treasuries dipped with the yield on the 10-year inching up to 4.30 percent. Gold steady above $3,350 per ounce while oil held a decline ahead of talks between the U.S. and Russia in Alaska on Ukraine.

U.S. stocks rose sharply overnight as in-line inflation data reinforced expectations that the Federal Reserve will cut interest rates soon.

Annual consumer price inflation held steady from the previous month at 2.7 percent in July, while economists had expected the pace of growth to tick up to 2.8 percent.

Core inflation, which excludes volatile food and energy prices, came in a tad higher than anticipated at 3.1 percent. The tech-heavy Nasdaq Composite surged 1.4 percent and the S&P 500 rallied 1.1 percent to reach new record closing highs while the Dow climbed 1.1 percent.

European stocks closed broadly higher on Tuesday after the U.S. extended its pause on higher tariffs for Chinese goods until November 10, averting an immediate escalation in the trade war.

The pan European STOXX 600 gained 0.2 percent. The German DAX dipped 0.2 percent, while France's CAC 40 added 0.7 percent and the U.K.'s FTSE 100 edged up 0.2 percent.