BENGALURU: Indian shares are set to open subdued on Tuesday, with HDFC Bank likely to edge higher on the prospect of rising inflows following an upgraded weightage in key MSCI emerging markets index.
The Gift Nifty was trading at 24,336, as of 8:42 a.m. IST, indicating that the Nifty 50 will open near its Monday’s close of 24,347.
The momentum of macroeconomic fundamentals and corporate earnings continue to remain strong for India, two analysts said, pointing at easing retail inflation.
India’s weight in the MSCI Global Standard index, which tracks emerging market stocks, has risen to a record high, and is likely to attract inflows of about $3 billion into its equity markets.
Indian benchmarks closed higher in the previous session, powered by financials, as traders shrugged off initial concerns over the impact of Hindenburg Research’s latest report.
Over the weekend, the US-based short seller had alleged that Madhabi Puri Buch, the head of the Securities and Exchange Board of India, previously held investments in offshore funds also used by Indian conglomerate Adani Group.
Buch denied the allegations, while the Securities and Exchange Board of India asked investors to remain calm and exercise due diligence.
Indian shares trim losses as banks offset Hindenburg report
About $2.43 billion, or 1%, had been wiped off the market value of Adani companies by the end of Monday, although that was a substantial recovery from earlier losses of more than $13 billion.
HDFC Bank, India’s top private lender and heaviest stock in the benchmark NSE Nifty 50, will be on investors’ radar on Tuesday after seeing an increase in its weightage in the MSCI index, which could trigger inflows of $1.8 billion.
Investor focus would also be on realty developer Prestige Estates Projects, drugmaker Zydus Lifesciences and telecom operator Vodafone Idea, which are among stocks that will be added to the MSCI Emerging Markets Index, effective Aug. 30.
Asian stocks rose, led by Japanese shares on the back of a steady yen, with traders awaiting data including the US inflation report to gauge the Federal Reserve’s policy outlook.