Indian stocks settle in red to kick off holiday-truncated week

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NEW DELHI : Indian stock market indices settled in the red on Tuesday, kicking off a holiday-truncated week in line with Asian peers, with investors now focusing on US inflation data due later this week.

The to-be-released inflation data could shed more light on the timing of the Federal Reserve’s first interest rate cut this year.

On Tuesday, Sensex closed at 72,470.30 points, down 361.64 points or 0.50 per cent, Nifty at 22,004.70 points, down 92.05 points or 0.42 per cent.
On Monday, the stock exchanges were closed on account of Holi. Later this week on Friday, the market will remain shut for Good Friday.

Last week, Indian stock indices traded firm, tracking a global stock rally after the US Federal Reserve, in its latest monetary policy review meeting, maintained its projection of three rate cuts this year.

The US Federal Reserve, in its March meeting, voted to leave the key interest rate unchanged at 5.25-5.50 per cent, keeping the policy rate unchanged for the fifth straight time on the trot. The US central bank stayed on track for three interest rate cuts this year and affirmed that solid economic growth will continue.

The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably towards 2 percent.

The US Federal Reserve’s commitment has been to bring down consumer inflation to its target of 2 per cent. The inflation rate in the US is now over 3 per cent.

Back home, foreign portfolio investors continue to remain net buyers in India. This also buoyed the stocks.

Foreign portfolio investors who had aggressively sold Indian stocks and turned net sellers in the Indian equity market in January 2024 became net buyers in February and March. This has also likely buoyed the stocks of late.

So far in March, they bought stocks in India worth Rs 38,098 crore, the latest data from the National Securities Depository Limited (NSDL) showed.

“Aligned with global trends, the domestic market sustained its consolidation pattern, ending close to 22,000. While key data such as US GDP and inflation during the week may provide some clues on future rate cut paths ..,” said Vinod Nair, Head of Research, Geojit Financial Services.

The fiscal year-ending truncated week, coupled with reduced trading volumes are likely to contribute to volatility, Nair added. (ANI)

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