Indian shares on track for muted open as inflation strengthens rate-hike concerns

Indian stocks looked likely to open flat on Tuesday as traders weighed continued Middle East unrest and expensive crude. According to Business Recorder, GIFT Nifty futures traded at 22,423.5 early in the morning, pointing to little movement for the Nifty 50 after its Monday close of 22,363.35.

Retail inflation accelerated to 5.54 per cent in September, beating expectations and nearing the central bank's 6 per cent upper tolerance band, data released on Monday showed. A poor monsoon and the conflict in Iran are adding to price pressures, which has bolstered the case for more rate hikes. HST Wealth founder Hariselvan Radhakrishnan warned that sustained food and energy costs could keep borrowing expensive for a longer period.

Separately, the Reserve Bank of India tightened rules on rupee non-deliverable derivatives, lifting the cash reserve requirement on banks' own rupee hedges to 20 per cent. The step is one of several central bank measures since Saturday aimed at steadying the rupee, which has weakened on costly oil and capital outflows. Foreign investors sold Indian shares worth 17.08 billion rupees on Monday, extending their selling to a 12th straight session, and have offloaded $4.9 billion so far in October.