Nifty, Sensex poised to open lower on geopolitical tensions, delayed Fed rate cuts

Pre-market cues: Indian benchmarks are expected to see a lower opening on Tuesday, mirroring a downward trend in Asia. This follows a decline in Wall Street on Monday, as stronger-than-anticipated US retail sales data dampened hopes of an imminent interest rate cut by the Federal Reserve.

The sentiment among investors is already subdued due to the ongoing geopolitical tensions in the Middle East. The recent attack by Iran on Israel using drones and missiles continues to weigh on risk assets.

Early indications point towards a lower opening for the Nifty 50 index, with the GIFT Nifty trading at 22,167 as of 7:56 AM IST, below its previous close of 22,272.50.

The delay in US rate cuts is another factor influencing the Indian markets. According to the CME FedWatch Tool, the possibility of the Fed maintaining interest rates in July has risen above 50 per cent, up from 43.5 per cent a day earlier. This shift in expectations comes after the positive US retail sales data.

Adding to the selling pressure, foreign portfolio investors (FPIs) have been net sellers of Indian equities for two consecutive days. On Monday, they offloaded ₹32.68 billion worth of stocks, following a sale of ₹80.27 billion on Sunday.

However, domestic institutional investors have been net buyers for the past five trading sessions, providing some support to the market.

The benchmark Nifty 50 and Sensex indices have witnessed a decline of nearly 2 per cent each in the last two days, falling from their record highs.

Stocks to watch

• Jio Financial Services: Partnered with BlackRock (BLK.N) from the US to establish a wealth management and broking venture in India.
• Cipla: Acquired the cosmetics and personal care business of Ivia Beaute for Rs 130 crore.
• Hindustan Unilever: Life Insurance Corporation of India (LIC) increased its stake in the company to 5.01 per cent from 4.99 per cent.