Domestic and global inflation print to remain in focus

Indian equities enter the week on a cautiously optimistic note. Last week, the GST Council unveiled sweeping tax cuts—including a simplified two-rate structure and lower levies on essentials—that lifted the Nifty above 24,700 level and some buying emerging in the mid- and small-cap segments. Concurrently, global cues remained supportive: weak U.S. labor data and dovish Fed signals buoyed rate-cut expectations, aiding regional markets. Domestically, the government’s tax and liquidity measures are seen as structural stimuli, laying the groundwork for economic recovery even if their impact remains gradual. In the near term, markets are likely to stay supported by domestic policy tailwinds and global easing expectations. Investors may focus on sectors tied to consumption and capital expenditure. However, continued caution is warranted amid evolving Fed guidance and the still-sensitive international trade outlook. In India, the Inflation Rate for August 2025 would be released on Friday (September 05). The annual consumer price inflation rate in India fell to 1.55% in July of 2025 from 2.1% in the previous month, to mark the ninth consecutive decrease in the inflation rate and only 1 basis point away from the series-low in June of 2017. In China, the balance of trade figures for august 2025 would be announced on Monday (September 08). China’s trade surplus came in at USD 98.24 billion in July 2025, though higher than the USD 85.27 billion recorded in the same month a year earlier, as exports continued to outpace imports. The Chinese Inflation Rate for August 2025 would be made public on Wednesday (September 10). China’s consumer prices were flat from a year earlier in July 2025, following a 0.1% gain in the previous month. In the United States, the monthly Producer Price Inflation (PPI) figures for August 2025 would be announced. The US producer prices rose 0.9% month-on-month (MoM) in July 2025, rebounding from a flat reading in June. It is the biggest increase in producer prices since June 2022. Year-on-year, headline producer inflation accelerated to a five-month high of 3.3% in July 2025. The PPI value for June 2025 was 2.4%. The US Inflation Rate for August 2025 would be unveiled on Thursday (September 11). The US annual inflation rate remained at 2.7% in in July 2025, the same as in June 2025. Meanwhile, core inflation, which excludes food and energy, accelerated to a five-month high of 3.1%, compared to 2.9% in June. The preliminary estimate for the Michigan Consumer Sentiment for September 2025 would be made public on Friday (September 12). The University of Michigan consumer sentiment for the US dropped to 58.2 in August of 2025 from the five-month high of 61.7 in the previous month, revised down from the preliminary estimate of 58.6.