Indian Stocks Trade Firm Ahead Of May Inflation Data Release

After a largely stable Tuesday, Indian stock indices kicked off today's session on a positive note, continuing with the bull run trend of the past several sessions.

In the early trade, Sensex and Nifty were 0.3 per cent up each and just below their all-time highs. Barring a couple of sectoral indices, all were in the green.

"The 32 per cent decline in India VIX during the last 5 days indicates that the days of heightened volatility are over and the market has entered a consolidation phase. From now on the focus will be on fundamentals and news flows," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"Tonight's US inflation numbers and the Fed policy outcome will influence the direction of the global equity market."

Now, market participants await US May inflation data and the Federal Reserve's policy decision this week. Besides, they await India's inflation data and will actively monitor the policy decisions of the new government.

India's retail inflation eased to 4.83 per cent in April, down from 4.85 per cent in March. However, consumer food price inflation surged to 8.70 per cent from 8.52 per cent last month. The retail inflation in India though is in RBI's 2 to 6 per cent comfort level but is above the ideal 4 per cent scenario.

Nirmala Sitharaman, who has been again allocated the finance ministry portfolio, and her fresh decisions will be widely tracked. She will soon present the full budget for 2024-25.

"US Fed commentary could provide direction to the market. So far investors are baking in 1 rate cut towards the end of the year; so any deviation from that could drive the market on either side," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

The US Federal Reserve, in its latest monetary policy meeting, voted to leave the key interest rate unchanged at 5.25-5.50 per cent, keeping the policy rate unchanged for the sixth straight time on the trot. (ANI)