Nifty, Sensex open lower tracking Asian peers amid fading Fed rate cut hopes

Stock market news: Indian shares commenced trading on a lower note on Friday, echoing the downtrend seen in Asian markets, as robust US inflation data dimmed hopes of an early Federal Reserve rate cut. Investor attention is now directed towards the domestic earnings season, with Tata Consultancy Services (TCS.NS) slated to report later in the day.

As of 9:33 am, the NSE Nifty 50 recorded a decline of 0.18 per cent, trading at 22,713.60, while the S&P BSE Sensex dipped 0.16 per cent to 74,915.09.

Seven out of the thirteen major sectors registered losses. However, the broader small-cap and mid-cap indices witnessed gains of 0.3 per cent and 0.1 per cent respectively, outperforming the blue-chip indexes.

Asian markets initiated the day on a downtrend, extending losses following the release of robust US consumer price inflation data, dampening expectations of an early Fed rate adjustment.

Market sentiment, which previously anticipated a rate cut in June, is now pricing in a pause in both the June and July policy meetings, according to the CMEGroup's FedWatch Tool.

Wednesday witnessed India's benchmarks achieving all-time closing highs, with the S&P BSE Sensex settling above the 75,000 mark for the first time.

The upcoming earnings season, commencing with Tata Consultancy Services reporting post-market close, will particularly spotlight IT stocks. However, expectations remain subdued for IT firms due to weak client spending in the US, as noted by VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Analysts foresee the earnings season influencing the market trajectory in the coming weeks.

Additionally, India's consumer price inflation data for March, expected to ease to a five-month low of 4.91 per cent, will be released post-market closure. However, it is anticipated to remain above the central bank's 4 per cent medium-term target, according to economists polled by Reuters.

Despite this, the Nifty and Sensex have gained approximately 1 per cent this week so far, with the potential to log a fourth consecutive weekly gain and the eighth out of the last nine weeks, driven by sustained domestic inflows and robust macroeconomic data.

Stocks to watch

• Dr. Reddy's Laboratories: The launch of the drug-free migraine management device Nerivio in Europe through its subsidiary.
• Phoenix Mills: Reporting a 22 per cent year-on-year jump in retail consumption in fiscal 2024, with March quarter gross retail collections rising 37 per cent.
• Metropolis Healthcare: Noting a 10 per cent year-on-year revenue growth in the March quarter.
• Computer Age Management Services: Granted authorisation by the Reserve Bank of India to operate as an online payment aggregator.