Indian shares to open flat due to global equity caution

Indian shares to open flat due to global equity caution

Indian Shares Set for Muted Start Amid Global Caution

BENGALURU, Aug 7 (ANBLE) – Indian shares are expected to have a quiet beginning on Monday, following the lead of Asian peers, as investors exercise caution ahead of the release of U.S. and China inflation data. Additionally, the Reserve Bank of India’s monetary policy decision, set to be announced later this week, adds to the uncertainty in the market.

India’s GIFT Nifty on the NSE International Exchange was up marginally by 0.09%, trading at 19,607.50 as of 7:56 a.m. IST. Meanwhile, Asian equities remained subdued, with the MSCI Asia ex-Japan adding just 0.05%.

The Reserve Bank of India’s policy decision, scheduled for Thursday, is keenly awaited by market participants. After two consecutive rate hikes totaling 250 basis points in the fiscal year 2023, the central bank had maintained rates unchanged in April and June. Now, investors are eagerly anticipating the outcome of this week’s decision.

Both the Nifty 50 and Sensex have faced consecutive weeks of losses. Adding to the concerns, foreign institutional investors (FIIs) have been net sellers of Indian shares for six consecutive sessions. On Friday alone, FIIs sold shares worth 5.56 billion rupees ($67.25 million).

Shrikant Chouhan, head of research (retail) at Kotak Securities, commented on the FII trend, stating, “FII trend in domestic equities too could be choppy in the near term.” It is worth noting that despite the recent challenges, India’s robust macroeconomic numbers and Morgan Stanley’s decision to upgrade India to overweight make it difficult for overseas investors to completely overlook the country, despite concerns about higher valuations.

Stocks to Watch

  • Britannia Industries (BRIT.NS): The biscuit maker’s profits have risen by an impressive 36% due to steady demand for packaged foods.

  • Bank of Baroda (BOB.NS): This state-owned lender has witnessed a nearly doubled net profit in the June quarter, thanks to an improvement in asset quality.

  • ICICI Bank (ICBK.NS): The private sector bank has received approval from the Reserve Bank of India to increase its shareholding in ICICI Lombard General Insurance Company up to 4%.

  • Gujarat Fluorochemicals (GUJL.NS): The company has reported a decline in consolidated profit in the June quarter.

The Indian stock market is currently experiencing a period of caution and uncertainty, driven by both global and local factors. Traders and investors will be closely monitoring the outcomes of major events such as the U.S. and China inflation data and the Reserve Bank of India’s monetary policy decision. However, alongside these challenges, India’s strong macroeconomic indicators and positive sentiment from influential institutions like Morgan Stanley continue to support the market. As always, investors should remain vigilant and adapt to changing dynamics, keeping an eye on the stocks mentioned above to stay informed about potential opportunities and risks in the market.