Indian Stocks Dip on US Inflation Fears

Indian equity markets are set for a negative opening on Thursday, driven by mixed global signals and an unexpected increase in U.S. inflation during July. This development fuels uncertainty regarding the Federal Reserve’s September policy decision.

Despite the cautious outlook, foreign institutional investors (FIIs) provided some support by remaining net buyers, acquiring equities worth Rs 502.63 crore on Wednesday.

Global Market Snapshot

• U.S. markets closed slightly lower on Wednesday, impacted by hotter-than-expected July inflation data. This raised further questions about the Federal Reserve’s future policy direction.
• Asian markets are largely trading in the green on Thursday. Investor sentiment received a boost following Nvidia’s latest earnings report, which surpassed expectations.
• Indian equity benchmarks, however, erased morning gains and concluded Wednesday’s session lower.

Economic and Trade Developments

India’s bilateral trade with Japan is projected to reach $50 billion by 2030, according to industry body Assocham. This growth is attributed to increasing economic complementarities and deeper business engagement between the two nations.

Commerce and Industry Minister Piyush Goyal is scheduled to visit the U.S. in late September. He will attend the G-20 Trade Ministerial in Milwaukee and engage in bilateral discussions with USTR Jamieson Greer, focusing on trade pact issues.

Defence Minister Rajnath Singh affirmed India’s position among the world’s top five economies. Singh stated that India would have become the third largest sooner if not for the recent global crisis, a milestone he expects the country to achieve regardless.

Minister Goyal also discussed reviewing the current trade pact with his Japanese counterpart, expressing hopes to expand its scope. A Comprehensive Economic Partnership Agreement (CEPA) between India and Japan was initially implemented in August 2011.

NRI Deposit Trends

Data from the Reserve Bank of India (RBI) indicates a significant decline in non-resident Indian (NRI) deposit inflows. Deposits decreased over 23 percent year-on-year to $2.775 billion during April-June 2026-27 (Q1 FY27).

This figure contrasts with inflows of $3.614 billion recorded in the corresponding April-June period of 2025-26.