Indian shares set for higher open ahead of January inflation data

Indian markets to open higher: Indian shares are expected to open higher on Monday, with investors anticipating a crucial inflation report for January following indications from the Reserve Bank of India (RBI) suggesting a pause in rate cuts.

The GIFT Nifty was trading at 21,934.50, as of 7:57 am, indicating that the NSE Nifty 50 will open near Friday's close of 21,782.50. 

Both the Nifty 50 and BSE Sensex incurred losses last week, primarily driven by financials and consumer stocks, following the RBI's announcement of tempered rate cut expectations and a forecast of elevated inflation for the fiscal year 2025.

Retail inflation in India is anticipated to have eased to a three-month low of 5.09 per cent in January, attributed to slower food price increases, according to a Reuters poll of economists. 

Santosh Meena, head of research at Swastika Investmart, noted, "This week, the markets will react to key macroeconomic data, including retail inflation on Monday and US inflation reading on February 13.

The last leg of the December-quarter earnings season can lead to stock-specific movements as well."

Foreign institutional investors (FIIs) bought shares worth Rs 142 crore on a net basis on Friday, while domestic institutional investors (DIIs) sold a net Rs 422 crore of shares.

Most Asian markets, including Hong Kong and South Korea, remained closed on Monday, with Chinese markets shut for the week.

On Wall Street, equities advanced on Friday, with chipmaker Nvidia leading the gains after reports surfaced of its plans to establish a new business unit.

Stocks to watch 

One 97 Communications: Company approved the formation of a group advisory committee on compliance and regulatory matters.

Hero MotoCorp: India's largest two-wheeler maker beat third-quarter profit estimates, helped by festive demand.

Power Grid Corporation of India: State-run energy transmission company acquired power transmission firm -Bidar Transmission for Rs 18.8 crore.

Divi's Laboratories: Drug ingredients maker reported a 17 per cent rise in third-quarter profit, but missed estimates.

(With Reuters Inputs)