Domestic shares likely to track Asian peers higher

Domestic shares are set to open higher on Wednesday, tracking Asian markets after a largely in-line US inflation data failed to impact expectations of a Federal Reserve rate cut in June, and as domestic consumer prices eased slightly in February.

The GIFT Nifty was trading at 22,455 as of 07:54 a.m. IST, indicating that the Nifty 50 will open above Tuesday’s close of 22,335.70.

Asian markets opened higher, with the MSCI Asia ex-Japan index adding 0.23%.

Wall Street equities gained overnight, with the S&P 500 logging a record high, after data showed the U.S. consumer price index (CPI) increased 0.4% in February, in line with a Reuters poll.

In the 12 months through February, the CPI rose 3.2%, slightly above the 3.1% estimate.

The sticky inflation reading, however, did not alter market expectations of a Federal Reserve rate cut in June, according to the CME’s FedWatch Tool.

India’s retail inflation eased slightly to 5.09% in February from 5.1% in January, data showed after market hours on Tuesday.

However, the rise in inflation was faster-than-expected 5.02% forecast by a Reuters poll of economists, due to elevated food prices.

India’s Nifty 50 and BSE Sensex were little changed on Tuesday after dropping about 0.7% each on Monday, as consolidation continued near record-high levels.

The broader and more domestically focussed small- and mid-caps, however, underperformed, dropping about 4% and 2%, respectively, in the last two sessions, after the markets regulator flagged concerns over elevated valuations and likely froth in the segments.

Both foreign portfolio investors and domestic institutional investors were net buyers of Indian equities on Tuesday, adding shares worth 731.2 million rupees (~ $9 million) and 23.58 billion rupees, respectively.

STOCKS TO WATCH

** ITC: British American Tobacco planned to sell shares worth $2.03 billion at 384 rupees to 400.25 rupees apiece, via block deal on Mar. 13, according to term sheet.

** Aurobindo Pharma: Company’s unit Eugia Pharma restarted distribution of aseptic productions manufactured at a unit that was temporarily stopped.

** Vedanta: Markets regulator ordered the company to pay Cairn UK $9.4 million for delayed dividends.

** Oriental Rail Infrastructure: Company’s unit secured order worth 12.49 billion rupees from Ministry of Railways for supply of 3,055 wagons. ($1 = 82.7870 Indian rupees)



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