Nifty, Sensex set for cautious start ahead of Powell speech

Stock market news: Benchmark indices are expected to open cautiously on Tuesday as traders anticipate comments from US Federal Reserve Chair Jerome Powell for hints on the timing of a potential rate cut.

As of 8:00 am, the GIFT Nifty was at 24,372, suggesting that the NSE Nifty 50 will open near its previous close of 24,323.85 on Monday. The Nifty 50 is approaching record-high levels and has been fluctuating within a narrow 200-point range over the past few sessions.

"Market participants appear to be in no hurry to decide the trajectory," noted Rupak De, senior analyst at LKP Securities.

Analysts predict that the upcoming earnings season and the national budget announcement on July 23 will serve as the next major catalysts for market direction.

Asian shares mirrored Wall Street's gains on optimism that Powell might adopt a dovish stance on rate easing. The likelihood of a 25-basis-point US rate cut in September has risen to approximately 74  per cent from 60  per cent a week ago, buoyed by recent soft inflation and labor market data, according to CME FedWatch.

Lower US rates enhance the appeal of emerging markets like India for foreign investors. Since the domestic election results in early June, foreign investors have injected Rs 37,697 crore ($4.52 billion) into Indian markets, reversing two months of outflows.

In the sectoral landscape, consumer stocks will draw attention following Godrej Consumer's report of softer sales for the June quarter. This contrasts with updates from Dabur and Marico late last week, which noted an uptick in sales growth due to improved demand.

Meanwhile, Nestle India, a constituent of the Nifty 50, announced that its shareholders have approved the continuation of the 4.5  per cent royalty payment to its parent firm.

Stocks to watch

• Urja Global: The Central Goods and Services Tax department conducted search operations at the company's corporate office.
• Century Textiles: The company is considering raising funds of up to Rs 1,000 crore.

(With Reuters inputs.)