Inflation Risks Cloud Interest Rate Outlook, Nifty Breaks Key Support

European markets opened flat on Tuesday amid thin liquidity following the U.S. Labor Day holiday, with sentiment dominated by renewed U.S.–Iran hostilities. Crude and European natural gas prices climbed, stoking inflation worries, while LME copper surged past $14,500/ton, a record driven by tariff disruptions. U.S. markets remain focused on labour resilience vs cooling inflation ahead of the September Fed policy meeting, with tech and semiconductors dictating intraday swings as Treasury yields fluctuate.

In India, the Indian Basket crude averaged $99–101/bbl in September, weighing on macros. Nifty fell 118 points to 23,779, breaching key swing lows and opening downside toward 23,600, with 24,000 acting as stiff resistance.

Defence stocks are likely to be in focus after the DAC cleared ₹1.10 lakh crore in acquisition proposals, with 98% reserved for domestic industry.