Sensex, Nifty rise on positive inflation data; US Fed meet in focus

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NEW DELHI: Domestic equity indices surged for 2nd straight day on Wednesday amid lower level of inflation on domestic front and better-than-expected inflation readings from the US.
The 30-share BSE sensex climbed 144.61 points or 0.23% to settle at 62,677.91. During the day, it jumped 301.81 points or 0.48% to 62,835.11.
The broader NSE Nifty advanced 52.30 points or 0.28% to end at 18,660.30.
From the Sensex pack, Tech Mahindra, Tata Steel, NTPC, IndusInd Bank, State Bank of India, Power Grid, HCL Technologies, Tata Consultancy Services and Larsen & Toubro were the major winners.
Nestle, Bharti Airtel, ICICI Bank, Asian Paints, Hindustan Unilever and UltraTech Cement were among the laggards.
Investors are now eyeing the decision by US Federal Reserve on interest rates as the outcome will set the tone for global markets, including India.
Domestic markets had rallied on Tuesday as well after data released by Centre a day before had shown good moderation in retail inflation. The consumer price index (CPI) based inflation declined for the second consecutive month to 5.88% in November, from 6.77% in October.
This is first time in 2022 that inflation number dipped below the Reserve Bank of India’s upper tolerance level of 6%.
India’s wholesale price-based inflation also fell to a 21-month low of 5.85% in November as prices of food, fuel and manufactured items softened, according to the official data released on Wednesday.
Meanwhile, the US CPI rose 0.1% in November, after advancing 0.4% in October. Economists had forecast the CPI gaining 0.3%.
“Better-than-expected inflation readings from major global economies, combined with increased appetite for IT stocks, aided the domestic market’s bullishness. US CPI inflation easing to 7.1 per cent in November will lower the chances of the Fed being hawkish. Though the Fed is largely expected to raise rates by 50 basis points, their comments on future inflation and rate actions would dominate market movements,” Vinod Nair, Head of Research at Geojit Financial Services told PTI.
The US central bank is expected to raise interest rates by 50 basis points at the end of its two-day policy meeting on Wednesday. Traders are also expecting smaller 25 bps hikes in the first two meetings of 2023.
The Fed’s policy decision is due at 00:30 am IST on Thursday (1900 GMT), followed by a press conference with its chair Jerom Powell.
(With inputs from agencies)

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