Indian equities are predicted for a muted start on Thursday, with regional gains offset by elevated crude prices and geopolitical tensions, despite supportive global cues and benign inflation data.
Indian shares are set for a muted start on Thursday, with Gift Nifty indicating a slightly softer open even as regional markets draw support from firmer global sentiment. Broad gains across Asia-Pacific markets, along with a steadier tone in U.S. inflation expectations, have offered some help, but Indian equities remain constrained by elevated crude prices.
Elara Securities said the latest Consumer Price Index reading, which rose to 4.45% year on year in July from 4.38% in June, was broadly in line with its estimate and stayed above the Reserve Bank of India’s target band for a second month since January 2025. The brokerage said the increase was still being driven mainly by food prices, while super-core inflation remained contained, suggesting the current growth-and-inflation mix may not justify a rate increase for now. It expects the central bank to keep policy unchanged through 2026, although it sees a possible 25 basis-point increase in the first quarter of 2027. Market sentiment overseas improved after softer-than-expected U.S. inflation data strengthened bets that the Federal Reserve will leave rates unchanged at its September meeting, while another round of strong earnings from artificial intelligence infrastructure firms lifted technology shares. Japan’s Nikkei 225 was up more than 1% and South Korea’s Kospi had risen over 3% in early trade, but domestic investors remained cautious as crude prices held firm amid the U.S.-Iran standoff over the Strait of Hormuz. Ponmudi R, chief executive of Enrich Money, said the oil-market tension was still the main drag on Indian equities. Hariselvan Radhakrishnan, founder and chief executive of HST Wealth, said Brent crude had eased modestly to below $89 a barrel, but the unresolved geopolitical risk kept a premium in energy markets. He also said Tata Group stocks could remain active after the chairman’s resignation, while banks may draw interest after Bank Nifty outperformed on Wednesday.
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