Indian stocks experienced a significant drop on Monday as investors held off on trading, anticipating the forthcoming key retail inflation data. This caution followed the Reserve Bank of India's recent signalling that there would be no hasty decisions to reduce interest rates.
Investors are also awaiting fresh insights from upcoming U.S. CPI data and speeches by Federal Reserve officials for predictions about when the Federal Reserve might commence reducing interest rates. It is projected that U.S. consumer price inflation may have slightly decreased in January, although it is expected to stay above the Fed's yearly target of 2%.
Federal Reserve Bank of Atlanta's President Raphael Bostic affirmed on Friday his continued focus on achieving the inflation target. Similarly, Lorie Logan, his counterpart from the Dallas Fed, suggested that the U.S. central bank should take the time to evaluate incoming data before deciding to cut rates. Later in the day, statements from three more central bank officials are expected.
On a positive note, concerns regarding the Middle East seem to be abating following the Israeli military's execution and completion of a "series of strikes" on southern Gaza, albeit without providing more details. In a separate development, Iran's foreign minister hinted that a diplomatic solution could be underway for the Israel-Hamas conflict.
The benchmark S&P BSE Sensex concluded the session 523 points down, a decline of 0.73%, at 71,072.49. Meanwhile, the broader NSE Nifty index fell 166.45 points, a reduction of 0.76%, ending at 21,616.05. Tata Steel, ONGC, BPCL, Hero Moto Corp, and Coal India declined by 3-5% in the Nifty pack. Conversely, HCL Technologies, Wipro, Divis Laboratories, Apollo Hospitals Enterprise and Dr Reddy's Laboratories increased by 2-3%.
