Indian stocks marginally higher at Monday opening bell; January inflation data in focus

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NEW DELHI: Indian stock indices started the fresh week marginally higher, extending gains from the past week, with investors eyeing retail inflation data for January to be released later in the day.

At 9.17 am just after the opening bell, benchmark Sensex was at 71,628.55, up 33.05 points or 0.046 per cent, and Nifty at 21,811.75, up 29 points or 0.1 per cent. Among the widely-tracked Nifty 50 companies, 26 advanced and the rest 24 declined at the time of filing this report.

Continued selling of Indian stocks by foreign portfolio investors coupled with high stock valuations, however, are concerns for the investors.

Foreign portfolio investors have been aggressively selling Indian stocks, turning net sellers in the Indian equity market so far in 2024, after making a beeline to accumulate domestic stocks during November and December. After selling stocks worth Rs 25,744 crore in January they have so far sold Rs 3,075 crore in February.

“A reversal of the FPI selling in equity will happen when the US bond yields drift down and stay there for long,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Meanwhile, retail inflation in India rose at its fastest pace in four months in December 2023, largely due to a spike in cereals, products and eggs. Sub-index for vegetables; meat and fish declined substantially.

Retail inflation in India, though, is in the RBI’s 2-6 per cent comfort level but is above the ideal 4 per cent scenario.

Retail inflation in India is unlikely to come down much but is expected to hold at nearly the same level in the January-March 2024 quarter. SBI Research had last noted that it expects CPI inflation to come down to 5.0 per cent by March 2024.

“The rebound in the banking majors has eased some pressure but it is too early to say that we are out of the woods. Traders should continue with a cautious approach, especially in the midcap and smallcap space and prefer a hedged approach,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd. (ANI)

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