Informist, Monday, Sept. 15, 2025

By Simran Rede

MUMBAI – India's headline equity indices are likely to be range-bound on Tuesday, as the market lacks fresh triggers for any substantial movement and awaits developments on the tariffs front, analysts said. All eyes will be on India's next round of trade talks with the US, starting in New Delhi on Tuesday. Market participants will also keep a watch on the outcome of the US Federal Open Market Committee's meeting, due 2330 IST on Wednesday.

On Monday, the Nifty 50 settled at 25069.20, down 44.80 points or 0.2%. The BSE Sensex ended at 81785.74, down 118.96 points or 0.2%. The Nifty 50 snapped an eight-session rising streak, while the Sensex broke its five-session winning run. Resistance for the 50-stock index is pegged at 25150–25200 points and support at 24900–24800 points, according to technical analysts.

Officials from India and the US will hold talks on a trade deal in New Delhi on Tuesday. India will also hold the next round of free-trade agreements with the European Union, Peru, and Chile on Oct. 6–10, Nov. 3–5, and Oct. 27-31, respectively. The government will also conclude the third round of free trade agreement talks with New Zealand on Sept. 19, and officials will hold the next round of talks for free trade agreement review with the Association of Southeast Asian Nations on Oct. 6-7.

Data released on Monday showed India's wholesale price index rebounded to 0.52% in August from (-)0.58% in July, which was a two-year low. The print rose on a year-on-year basis for the first time in three months in August, driven by an increase in food prices even as fuel-related categories continue to exert downward pressure.

Sequential growth across most segments suggests fading out of deflationary trends, Prakash Prasad, economist at Punjab & Sind Bank, said in a report. Volatile food prices raise risks of an increase in short-term inflation. "Fuel deflation remains critical in keeping headline inflation subdued, reflecting the impact of global crude price softness," Prasad said. The return of WPI inflation in positive territory suggests India is exiting wholesale deflation, but the pickup remains uneven, Prasad said.

Food inflation will be crucial for the inflation trajectory over the next quarters, particularly given the impact of the monsoon, according to Prasad. Rising food prices indicate opportunities for banks to expand credit to farmers and agri-businesses for inputs and storage solutions. Persistent deflation in fuel-related categories indicates favourable terms of trade, which will support pressures from lower input costs, he said. "With headline WPI still modest, monetary policymakers may not face immediate inflationary pressures from wholesale prices, though rising food inflation warrants monitoring," he said.

On the global front, the US Federal Open Market Committee's two-day meeting starting Tuesday will be in focus with the Fed widely expected to cut the Federal funds rate by 25 basis points at the meeting. According to the CME FedWatch Tool, 96.2% of market participants expect the central bank to reduce the key interest rates by 25 bps, while chances of a 50-bps rate cut have come down to 3.8% from 10.6% last week.

Traders and analysts also expect the Fed to cut rates by 25 bps each at its September, October, and December meetings. "Post 75 bps cut in CY25, we expect the pace of rate cuts to be quarterly. The US labour market risks have amplified and hence, Fed's reaction function is now likely to tilt towards containing these negative impulses," economist Garima Kapoor said in Elara Securities (India)'s report. "While risks to inflation persist, data shows that a tariff hike has been absorbed both by US importers and consumers." The brokerage firm expects core personal consumption expenditure inflation for 2025 to be 2.9% on year as plummeting services inflation has led to a a limit on the surge in headline inflation, the report said. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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