By Vivek Kumar M and Bharath Rajeswaran
(Reuters) -Indian equity benchmarks were muted on Tuesday as gains in IT stocks offset a pullback in heavyweight financials after a rally in the previous session, while investors awaited key U.S. and domestic inflation data.
The Nifty 50 was up 0.05% at 24,596.3 points and the BSE Sensex added 0.04% to 80,636.03, as of 10:39 a.m. IST.
Twelve of the 16 major sectors logged marginal gains. The broader small- and mid-caps traded flat.
Financials, which rose 0.9% in the previous session, fell 0.6% on Tuesday.
IT companies, which receive a substantial chunk of their revenue from the U.S., rose 0.75%, buoyed by the U.S.-China trade truce.
The extension of the truce averts triple-digit duties that slowed down growth in the U.S., stoked inflation, and delayed corporate discretionary spending, including on technology.
All eyes will also be on U.S. CPI data later in the day, which is likely to influence the Federal Reserve’s rate-cut path. Lower U.S. rates typically boost the appeal of emerging market equities, including India, as yields on U.S. Treasuries fall.
Analysts said any recovery in Indian equities will be limited as investors await talks between the U.S. and Russian presidents on Friday.
“The 90-day extension of trade truce between U.S. and China is positive news (for sectors like IT). However, we do not expect a major rally as the main event that markets are focused on is Trump-Putin meeting in mid August,” said Pankaj Pandey, head of retail research at ICICI Securities.
The caution comes as the U.S. last week announced fresh 25% tariffs on India, taking the total to 50%, for its Russian oil purchases.
Investors also await India’s July retail inflation data, due after market hours, with a Reuters poll forecasting an eight-year low of 1.76% on cooling food prices.
(Reporting by Bharath Rajeswaran and Vivek Kumar M in Bengaluru; Editing by Sherry Jacob-Phillips, Harikrishnan Nair and Sonia Cheema)
