Indian markets will remain shut on Friday due to a public holiday. There is no major change in fundamentals even after softer inflation prints, and hence the focus has shifted to the debt sale and investor appetite, a trader with a state-run bank said. New Delhi aims to raise 390 billion rupees ($4.76 billion) through the sale of bonds, which includes a new three-year as well as seven-year paper along with the liquid 14-year note. "Unless we have some major fresh positive cues, the benchmark bond yield will likely continue to witness strong resistance at the 7.20% level on the downside," the trader said. The inversion of the U.S. yield curve eased after data on Wednesday showed the U.S. consumer price index (CPI) rose 0.1% last month after advancing 0.4% in February. In the 12 months through March, the CPI rose 5.0%, the smallest year-on-year gain since May 2021. However, the odds of a 25 basis point (bps) rate hike by the Federal Reserve in May stayed above 70% as core inflation remained elevated.
Meanwhile, India's annual retail inflation for March was at
5.66%, below the central bank's upper tolerance level of 6% for
the first time in 2023 and lower than a Reuters forecast of
5.80%. The reading was also the lowest since December 2021.
The preliminary estimate for April inflation is tracking at
4.6%, IDFC First Bank said in a note.
The inflation data comes after the Reserve Bank of India
maintained status quo on policy rates last week, even as markets
factored in a 25 bps rate hike.
($1 = 81.9500 Indian rupees)
(Reporting by Dharamraj Dhutia
Editing by Sonia Cheema)
