Indian Shares Poised for Flat Open as Global Rally Pauses

Indian equities are anticipated to commence trading with minimal changes on August 29, 2023, as the NSE Nifty 50 index hovers near its peak. This comes as the global market rally, fueled by expectations of U.S. interest rate reductions, takes a breather.

The GIFT Nifty, a derivative product based on the Nifty 50, indicated a flat opening around 25,025.5 points at 08:04 a.m. IST, suggesting the NSE Nifty 50 would start close to its previous close of 25,010.6.

Asian markets experienced a downturn, with the MSCI Asia ex-Japan index declining approximately 0.4%. Investors are currently assessing potential U.S. interest rate cuts and awaiting financial results from Nvidia, a prominent player in AI technology.

Oil prices saw an increase, with Brent crude futures settling at $81.43 per barrel, before retreating to around $81 in Asian trading hours. This surge in oil prices could potentially impact India, the world's third-largest oil importer and consumer.

Market participants are eagerly anticipating the release of U.S. personal consumption and core inflation data, scheduled for September 1, 2023. These figures are expected to provide insights into the Federal Reserve's future rate decisions.

The Nifty has recorded gains for eight consecutive sessions, edging closer to all-time highs. This upward trend has been supported by expectations of a U.S. rate cut in September 2023 and sustained inflows from domestic investors.

"There might be some profit booking early in the session as traders look to capitalise from the recent rally."

Domestic Institutional Investors (DIIs) have maintained their position as net buyers of Indian equities for 16 consecutive sessions, while Foreign Institutional Investors (FIIs) have been purchasing Indian shares for three straight sessions.

Several key stocks are under the spotlight:

• Hindustan Unilever: Received a tax demand of 9.63 billion rupees from the income tax department.
• Ultratech Cement: Raised $500 million through sustainability-linked financing.
• HCL Technologies: Extended agreement with Xerox to drive innovation in AI and digital engineering.
• AU Small Finance Bank: Morgan Stanley and Societe Generale acquired stakes, while Fincare Business sold a 1.7% stake.

As the Indian market approaches record levels, investors are advised to monitor global cues and domestic economic indicators closely. The interplay between U.S. monetary policy, oil prices, and corporate performance will likely shape market sentiment in the coming days.