The US markets ended higher on Thursday after the Labor Department released a report showing the annual rate of consumer price inflation accelerated by slightly less than expected in the month of July. Asian markets are trading mixed on Friday on the back of a retreat in U.S. bond yields and the dollar index.

Back home, Indian equity benchmarks remained volatile on the weekly expiry day and lost nearly half a percent on Thursday as investors remained on the sidelines ahead of the US inflation data announcement. Key gauges made a negative start and stayed in red for whole day, amid the Reserve Bank of India’s monetary policy decision, weak global cues, and weekly F&O expiry. The Reserve Bank of India (RBI) has decided to keep policy rate unchanged for third time in a row as it maintains heightened vigil on inflation. The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022. It also directed banks to maintain incremental cash reserve ratio (ICRR) at 10 per cent, August 12 onwards, in order to reduce liquidity from the system. Besides, it increased FY24 inflation forecast to 5.4 per cent from 5.1 per cent, discounting near-term risks. Weakness continued over the Dalal Street in late afternoon deals as traders also remained cautious with a private report that the rate of price rise for the consumer basket likely breached the central bank's upper tolerance level of 6 per cent in July. Traders paid no heed towards data showing that Foreign Institutional Investors (FIIs) turned buyers on Wednesday after continuous offloading of equities for the past several days. They bought equities worth Rs 644.11 crore on Wednesday. Traders also overlooked Securities and Exchange Board of India’s (SEBI) annual report for the financial year 2022-23 revealing that over 400 new foreign portfolio investors (FPIs) joined the Indian markets in the last financial year. According to the data, the number of FPIs operating in India increased to 11,081 from 10,608 in FY22. Finally, the BSE Sensex fell 307.63 points or 0.47% to 65,688.18 and the CNX Nifty was down by 89.45 points or 0.46% to 19,543.10.

The US markets ended lower on Wednesday as investors awaited key inflation readings that could provide clues to the Fed's monetary policy path. Asian markets are trading mixed on Thursday as investors braced for July consumer price index data out from the US.

Back home, Indian equity benchmarks closed higher on Wednesday, helped by fag-end buying in index majors JSW Steel, Tata Motors and Mahindra & Mahindra amid a positive start in European markets. Key gauges opened flat and slipped into the red as the day progressed as traders were anxious ahead of two major events -- RBI’s monetary policy and the US inflation data -- due to be announced on Thursday. Traders were also concerned with a private report indicating that India's retail inflation likely accelerated to 6.40% in July on surging food prices, breaching the upper end of the Reserve Bank of India's 2%-6% tolerance band for the first time in five months. Besides, persistent foreign fund outflows weighed down on the sentiments. Provisional data from the National Stock Exchange (NSE) showed foreign institutional investors (FII) offloaded shares worth Rs 711.34 crore on August 8. However, last-hour buying helped markets to erase all the losses and end higher. Traders got support as the World Trade Organization (WTO) said that two separate dispute settlement panels have stated that India and the US have mutually resolved disputes with regard to certain measures on steel and aluminium products, and additional duties on certain products from the US. Some support also came with Sanjeev Sanyal, Member of the Economic Advisory Council to the Prime Minister, stating that the country should be confident enough to deconstruct the rest of the world on its own terms as a rising economic power, creating global norms and benchmarks in various fields. He said India should no longer be bound by benchmarks that are decided by third parties, and in which the country has no role in framing. Traders also took a note of Finance minister Nirmala Sitharaman’s statement that the 28 per cent GST on full face value of supplies in casinos, race courses and online gaming will result in higher revenues. Finally, the BSE Sensex rose 149.31 points or 0.23% to 65,995.81 and the CNX Nifty was up by 61.70 points or 0.32% to 19,632.55.