Soft US Inflation Eases Interest Rate Pressure on Indian Stocks

Indian stocks are poised for a quiet start to trading after a softer-than-expected US inflation reading eased pressure on interest rates. The July US consumer price index came in at barely any increase, indicating that the economy is cooling and reducing the likelihood of another rate hike from the Federal Reserve.

This supportive backdrop has been tempered by renewed tension in the Middle East, which has kept energy markets cautious. Oil prices fell around 1% after forecasters trimmed their long-term demand outlook.

Meanwhile, India's retail inflation ticked up to 4.45% in July, but this reading is not seen as a trigger for near-term tightening of monetary policy.

The main market movers on Tuesday will be the MSCI index rebalancing and Bank of America's deal with Jio Financial Services' lending unit. The reshuffle could lead to forced buying in Laurus Labs, Lenskart, Adani Energy Solutions, and Groww as funds track the benchmark and active managers adjust their portfolios.