NEW DELHI: India’s equity market rose in tandem with global peers after the October US inflation data indicated that inflation has peaked. This has raised hopes that the US Federal Reserve and central banks worldwide (including the RBI) would slow down and eventually stop hiking key interest rates in near future.
Led by heavyweights -- HDFC twins, information technology (IT) stocks, Reliance Industries, Tata Steel, L&T and Bajaj twins -- the BSE Sensex touched a fresh 52-week high of 61,841 intraday, while the broader Nifty50 peaked to 18,362.
The benchmarks, eventually, closed the Friday session about 2% higher at 61,795, and 18,350 levels, up 1,181 points and 322 points, respectively. “Equity markets across the world, developed and developing, were strong as the inflation data in the US was better than expected.
This essentially has reduced the recession probability from 60% to 40% and has brought down the expectation of a peak benchmark rate from 5.25% to 5%. This is the first spark of good news from the US in a long time and has been instrumental in lifting investor sentiments,” said Sushant Bhansali, CEO, Ambit Asset Management.
Data released by the Bureau of Labour Statistics (US) on Thursday showed that US Inflation for October has come in at 7.7% as against 8.2% in September and 8.3% in August. Following this, Dow Jones jumped 3.7% and the S&P 500 galloped 5.54%, its biggest rally since April 2020.
Major Asian benchmarks grew by 2-7% on Friday. Devang Mehta, head - equity advisory, Centrum Wealth, said it is too early to predict, but if the global volatility subsides & if the sentiment improves, India will receive a huge share of foreign institutional investments in addition to already strong domestic flows (SIPs close to 13000 Cr every month). FIIs made a net investment of `3,958 crore on Friday, as per the NSE data.
He added that Indian markets have been like a silver lining with good macros and micros amid the global dark clouds of high inflation, interest rates and global recession fears. The prospects of less hawkish moves by the Federal Reserve also helped the rupee to appreciate by 62 paise to close at 80.78 (provisional) against the US dollar on Friday. The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.82% to 107.31.
Indices touch new highs
Sensex
New 52-week high: 61,841
Closed 1.95% higher at 61,795
Nifty
New 52-week high: 18,362
Closed 1.78% higher at 18,350
Top gainers in Sensex Pack
HDFC Twins: About 6% each
Infosys: 4.51%
Tech Mahindra: 3.64%
HCL Tech: 3.56%