Sensex, Nifty Drag Despite Inflation Cheer: US Fed Policy, FII Selling Keep D-St in Check

The Indian stock market faced a subdued session today, with both the Sensex and Nifty experiencing losses despite positive inflation data. The Sensex fell by 0.8% while the Nifty ended lower by 0.6%, reflecting the cautious sentiment among investors.

While the inflation figures provided some relief, particularly with a slight dip in retail inflation, key factors such as the US Federal Reserve’s monetary policy and continued selling by Foreign Institutional Investors (FIIs) weighed heavily on the markets. The US Federal Reserve's stance on interest rates and potential tightening measures have raised concerns about global liquidity and their impact on emerging markets like India.

FIIs have been net sellers in the Indian equity markets for the past few sessions, which added to the downward pressure. Investors are also awaiting further cues from global markets, particularly the US, where economic data and policy signals continue to dominate investor sentiment.

Analysts remain cautious, suggesting that while domestic inflation trends may be under control, external factors like global interest rate hikes and FII movements are likely to keep market volatility high in the near term. Investors are advised to stay vigilant, monitor global developments closely, and look for opportunities in specific sectors that could benefit from the current economic landscape.