Sensex, Nifty Seen Opening Flat As Sticky US Inflation Dents Early Rate-cut Hopes

(RTTNews) - Indian shares look set to open on a flat note Wednesday amid mixed catalysts.

Data showed overnight that U.S. inflation continued to ease but much of core inflation remains sticky, effectively closing the door on the possibility of a Federal Reserve interest-rate cut before June.

Closer home, India's retail inflation softened marginally to 5.09 percent in February - staying within the Reserve Bank of India's (RBI) tolerance range of 2-6 percent.

On the other hand, India's industrial production growth moderated to 3.8 percent in January from 4.2 percent in December.

Second-line stocks could be in focus today after SEBI raised concerns about the build-up of froth in the midcap and small-cap space and ICICI Prudential Asset Management Company said it would suspend fresh subscriptions through lumpsum mode and switches into ICICI Prudential Smallcap Fund and ICICI Prudential Midcap Fund effective 14 March.

Benchmark indexes ended flat to marginally higher on Tuesday, paring early gains. The rupee fell by 3 paise to close at 82.78 against the dollar.

Asian markets traded mixed this morning despite a record rally on Wall Street overnight, led by technology stocks.

The dollar held steady against its major rivals while gold inched up marginally after falling from record highs on Tuesday.

Oil prices rose in Asian trading on expectations of strong demand in the United States.

U.S. stocks rebounded overnight as inflation data largely met expectations, with CPI rising 0.4 percent on the month and 3.2 percent year-on-year in February. Core inflation came in at 0.4 percent versus forecasts for a 0.3 percent gain.

The tech-heavy Nasdaq Composite jumped 1.5 percent after two days of losses. The S&P 500 rose 1.1 percent to a new record closing high and the Dow gained 0.6 percent.

European stocks closed on a buoyant note Tuesday as weak German inflation, U.K. unemployment and wage growth data spurred hopes of rate cuts by the European Central Bank and the Bank of England.

The pan European STOXX 600 advanced 1 percent. The German DAX climbed 1.2 percent, France's CAC 40 added 0.8 percent and the U.K.'s FTSE 100 rallied 1 percent.