13 Jul , 2021 By : Kanchan Joshi
Mumbai: Indian stock markets on Tuesday opened higher tracking gains in global equities. Investor sentiment was also boosted as India’s retail inflation cooled marginally in June.
The benchmark Sensex rose 0.4% to 52.574 points, while Nifty gained 0.4% to 15,754.
Asian shares climbed in early trade on Tuesday after Wall Street hit record highs overnight, as investors await the second-quarter earnings season and a batch of economic data, including key US inflation figures later in the day.
Investors brace for an eventful week which will include the start of the U.S. earnings season, inflation data from several countries, and testimony by Federal Reserve Chair Jerome Powell. The testimony will be scrutinised for clues on the timing of potential U.S. tapering.
In India, the June inflation eased marginally to 6.26% year on year versus 6.3% in May, undershooting consensus on pockets of a slower increase in food, softer core and base effects. Core inflation (ex-fuel food) eased to 6.2% in June from 6.4% in May.
Meanwhile, industrial output grew 29.3% in May 2021, only slightly lower than the Bloomberg consensus of 32%. Brokerage firm Motilal Oswal expected IIP to stay broadly flat in Jun'21, before moving slightly into positive territory from July onwards.
"The RBI monetary policy committee is likely to stay focused on growth with an eye on the risks of a third wave, but members are likely to express discomfort on the recent bout of sticky inflation, in the absence of supply-side corrective step," said Radhika Rao, economist at DBS Group Research.
Analysts said equity markets so far have shown strong resilience while facing headwinds from the advent of a possible third Covid-19 wave and volatility around the US Fed taper talk. It has been consolidating for quite some time due to lack of trigger. Q1FY22 earnings season has started off and thus could provide some direction to the market as investors would eye management commentary to gauge the scale of economic recovery.
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