Sensex, Nifty To See Modest Gains At Open With Inflation Data In Focus

(RTTNews) - Indian shares may see modest gains at open on Tuesday, though volatility cannot be ruled out ahead of key U.S. inflation data due out later in the day.

It is feared that a stronger-than-expected inflation reading could force the Fed to get more hawkish. Last week, several Fed officials reiterated their hawkish stance in order to attain a sufficiently restrictive stance of policy.

Closer home, India's retail inflation accelerated for the first time in four months in January and cut across the Reserve Bank's target corridor amid rising prices for fuel and clothing among others, according to data released by the statistics ministry.

The consumer price index, or CPI, climbed 6.52 percent year-over-year in January, faster than the 5.72 percent gain in December. Economists had forecast 5.90 percent inflation.

The unexpectedly large jump in headline consumer price inflation in January is a clear challenge to the view that the hiking cycle is at an end, Capital Economics economist Shilan Shah said.

Benchmark indexes Sensex and Nifty fell around half a percent each on Monday to extend losses for a second consecutive session, while the rupee dropped 12 paise to close at 82.70 against the dollar.

Asian markets were seeing modest gains this morning while the dollar treaded water ahead of the nomination of a new BOJ governor.

Gold edged up slightly while oil prices fell more than 1 percent after the U.S. government said it will release more crude from its Strategic Petroleum Reserve.

U.S.-China tensions eased somewhat, with reports suggesting that U.S. Secretary of State Antony Blinken is considering a meeting with top Chinese diplomat Wang Yi at a security conference later this week.

U.S. stocks rose sharply overnight after closing out their worst weekly performance of 2023 on Friday.

The Dow and the S&P 500 both climbed around 1.1 percent while the tech-heavy Nasdaq Composite rallied 1.5 percent despite lingering worries about the outlook for inflation and interest rates.

European stocks advanced on Monday after the European Commission marked up its economic growth forecast for the bloc this year to narrowly avoid a recession.

The pan-European STOXX 600 gained 0.9 percent. The German DAX rose 0.6 percent, France's CAC 40 index added 1.1 percent and the U.K.'s FTSE 100 inched up 0.8 percent.