Indian Markets Dip 0.5% Anticipating US Inflation Data

The Indian markets experienced a drop of nearly 0.5 percent on September 11, mirroring global declines amid anticipation for an important United States inflation report and concerns regarding the Federal Reserve's possible delay in easing monetary policy. Traders are also considering the effects of the US presidential debate. 
 
Stocks from both the US and Asia saw depreciation due to worries about growth, while Japan's currency increased in strength following hints at further rate increases by a Bank of Japan member. Oil prices dipped below $70 as Treasury yields fell ahead of American inflation data and next week's Fed meeting. 
 
The main point of concern is whether or not the Fed will aggressively reduce rates during their meeting next week or if they will opt for a more gradual approach given that job market progress has slowed down recently. The Consumer Price Index (CPI) data set to be released this Wednesday is expected to influence these expectations. 
 
India’s benchmark Sensex index dropped by 398 points (0.49 percent), closing at 81,523.16, while Nifty declined by 122.65 points (also 0.49 percent), ending at 24,918.45. 
 
Among various sectors, the Nifty Oil & Gas Index faced significant losses with a decrease of two percent, followed closely behind by the Nifty PSU Bank and Nifty Metal, which decreased by 1.8 percent and 1.5 percent, respectively. Both Nifty Auto and Realty also suffered losses amounting to decreases of around one-fifth each. 
 
On September 12th, Vinod Nair, Head Researcher at Geojit Financial Services, stated that there was some minor consolidation within domestic markets similar to those seen among Asian peers due primarily to corrections in commodity prices like crude oil, which had fallen sharply down towards $70 per barrel. 
 
Market sentiment remained wary as slowdowns were observed within China’s economy, while investors eagerly awaited upcoming releases relating directly to consumer price index figures from both American and domestic sources. It's predicted that US inflation will show a monthly increase while domestic inflation is expected to remain stable. 
 
Prashanth Tapse, Senior VP (Research) at Mehta Equities, noted the volatility of the trading session, with late trades experiencing intense profit-taking, which dragged key indices deeper into red by closing time. 
 
Shrikant Chouhan, Head Equity Research at Kotak Securities, observed profit booking happening at higher levels in benchmark indices such as Nifty and Sensex. Among sectors, Oil & Gas and PSU Bank lost most ground, whereas selective Pharma and FMCG stocks saw buying interest increasing at lower levels on daily charts where a small bearish candle was formed, suggesting temporary weakness. 
 
In conclusion, it appears that current market trends are weak, but any fresh selling activity would only be possible after dismissal of the 20-day simple moving average or below certain set points. On the flip side, there are certain key levels for bulls above which markets could bounce back towards positive growth again.