India’s stock benchmarks inch lower

MUMBAI: Indian equity benchmarks inched lower on Tuesday as a drop in financials weighed ahead of key US and domestic inflation readings.

The Nifty 50 fell 0.4% to 24,487.4 points and the BSE Sensex shed 0.46% to 80,235.59. Investors await US CPI data due later in the day which will guide the Federal Reserve’s rate-cut path. Lower US rates typically boost the appeal of emerging market equities, including India, as yields on US Treasuries fall.

Eight of the 16 major sectors logged gains. The broader small-caps were flat, while mid-caps slipped 0.3%.

Financials, which gained 0.9% in the previous session, reversed course and fell 1% on Tuesday.

IT rose 0.4%, on the back of a US-China tariff truce extension that averts triple-digit duties that is expected to shield US growth, curb inflation risks, and support corporate discretionary spending, including on technology.

Pharma advanced 0.7%, buoyed by strong results from Abbott India and Alkem Laboratories. The sector, like IT, counts the US as a key market. Investors also await India’s July retail inflation data, due after market hours, with a Reuters poll forecasting an eight-year low of 1.76% on cooling food prices.

The modest sized drop in benchmark indexes “reflects reluctance among investors to make significant moves ahead of key inflation data, while uncertainty also lingers with a second round of tariff hikes scheduled later this month,” said Devarsh Vakil, head of prime research at HDFC Securities. Among stocks, Marksans Pharma and Astral fell 11.1% and 8.1% after reporting weaker quarterly profits.