GIFT Nifty hints towards flat opening; U.S. inflation rises mildly despite mounting tariff pressure

GIFT Nifty:

GIFT Nifty August 2025 futures were currently trading 17 points (or 0.07%) higher, suggesting a possible higher start for the Nifty 50 today.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 3,398.80 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 3,507.93 crore in the Indian equity market on 12 August 2025, provisional data showed.

According to public data, FPIs have sold shares worth Rs 18,620.32 crore in the cash market during August 2025. This follows their cash sales of shares worth Rs 47,666.68 crore in July 2025.

Global Markets:

Markets in Asian mostly advanced on Wednesday after the latest U.S. inflation data raised hopes that the Federal Reserve could cut interest rates next month.

In Japan, a report showed manufacturers grew more confident about business conditions after a trade agreement with the United States.

The monthly poll, which tracks the Bank of Japan's quarterly tankan business survey, reportedly showed the manufacturers' sentiment index rising to plus 9 in August from plus 7 in July, marking a second straight month of improvement.

Further, Japan's annual wholesale inflation slowed for the fourth straight month in July, data showed on Wednesday, underscoring the central bank's view that upward price pressure from raw material costs will dissipate. The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 2.6% in July from a year earlier, data showed, slowing from the previous month's 2.9% increase. It compared with the widely reported median market forecast for a 2.5% rise.

On Wall Street, stocks ended higher on Tuesday as inflation data was tamer than expected, soothing investor fears that tariffs are not spiking prices.

The trading session saw the S&P 500 and tech-heavy Nasdaq Composite close at fresh record highs. The S&P 500 added 1.1% to settle at 6,445.76, while the Nasdaq ended 1.4% higher at 21,681.90. The Dow Jones Industrial Average added about 483 points, or 1.1%, to close at 44,458.61.

A widely followed measure of inflation accelerated slightly less than expected in July on an annual basis. The consumer price index increased a seasonally adjusted 0.2% for the month and 2.7% on a 12-month basis, the Bureau of Labor Statistics reported Tuesday.

Excluding food and energy, the core CPI increased 0.3% for the month and 3.1% from a year ago. The monthly core rate was the biggest increase since January while the annual rate was the highest since February.

Thursdays producer price index report on wholesale inflation will add another piece of the economic picture. The report comes ahead of the Feds Jackson Hole meeting on Aug. 21-23, which could also help shape expectations for the central banks next policy move.

Domestic Market:

Domestic equity benchmarks ended a choppy session in the red on Tuesday, with the Nifty slipping below the 24,500 mark as weakness in banking and financial counters weighed on sentiment. In contrast, pharmaceutical and healthcare shares managed to eke out gains, providing some cushion to the broader market.

The subdued close reflected cautious investor mood amid mixed global cues and lingering uncertainty. Traders stayed on edge ahead of the release of Julys domestic inflation data and a crucial US inflation report, both seen as likely drivers of near-term interest rate expectations.

The S&P BSE Sensex dropped 368.49 points or 0.46% to 80,235.59. The Nifty 50 index declined 97.65 points or 0.40% to 24,487.40.

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