Indian equities are poised for a modest gain on Wednesday, buoyed by positive sentiment across Asian markets and fresh signs of easing inflation both at home and in the U.S., Bloomberg News reported. Softer U.S. consumer price data overnight fueled bets on a potential Federal Reserve rate cut, while India’s own inflation cooled to its lowest level in eight years, offering a rare bright spot amid lackluster corporate earnings and trade tensions with Washington.
Consumer price inflation fell below the Reserve Bank of India’s 2%-6% tolerance band, largely due to continued weakness in food prices. However, Rahul Bajoria, head of India and ASEAN economics at Bank of America, cautioned that the favorable base effect from last year is fading, and policymakers are unlikely to shift rates soon as they focus on the effective transmission of the 100 basis points in cuts already delivered.
In the derivatives market, JPMorgan noted that India’s low volatility environment is creating opportunities for options traders, with August out-of-the-money calls or puts on the NSE Nifty 50 Index offering high leverage at relatively low cost.
Not all corners of the economy are benefiting from the stability. An IIFL report flagged growing stress in loans to small and mid-sized businesses for non-banking finance companies, with analysts warning that U.S. tariffs or a broader slowdown could eventually weigh on even larger, secured loans.
Meanwhile, India’s state-owned banks are outperforming their private-sector peers for the first time in four years, according to Bernstein. Public lenders delivered stronger growth in retail segments like home loans and small-business lending last quarter, challenging the prevailing view that private banks would maintain a consistent lead in credit expansion.
Key earnings to watch today include Indian Railway Catering, United Spirits, and Bharat Petroleum Corp.
