Indian equity benchmarks hit fresh record highs on Thursday’s trade, driven by lower-than-expected US inflation rate and as June quarter earnings started coming.
The BSE Sensex surpassed the 66,000 mark for the first time as it gained more than 600 points on gains in State Bank of India, HDFC Bank, Reliance Industries and IT majors. The NSE Nifty 50 gained over 160 points to zoom past the 19,550 mark.
The US inflation rate for June came in at 3 per cent, which is below the market expectations, the smallest year-over-year increase in two years.
However, retail inflation (CPI) in India for June increased to 4.81 per cent, after declining for four consecutive months, as food prices rose , according to official data released post-market hours on Wednesday.
“Markets are positive here as inflation data from US has shown some moderation giving hopes that Federal Reserves could cut interest rates,” said Avinnash Gorakssakar, Head of Research at Precision Investment Services.
“FPIs have countinued to put more liquidity in Indian markets which has also boosted the market sentiment. In addition, Prime Minister Narendra Modi’s visit to France from today onwards is also considered important from a strategic point of view especially defence,” he said.
From the Sensex pack, Infosys, TCS, Tech Mahindra, Bajaj Finserv, Wipro, Tata Steel, Ultratech Cement, HDFC Bank, Axis Bank, State Bank in India, Indusind Bank, ICICI Bank, opened with gains, while HCL Tech, Hindustan Unilever, Asian Paints, Power Grid, Nestle and Asian Paint.
“Encouraging global support as well as better than expected quarterly earnings from domestic companies propelled Sensex & Nifty to fresh record highs. Stocks like Infosys, TCS, HDFC Bank and Reliance Industries are the pillars supporting the markets. The fresh rally has come even as rising inflation remains a concern. Traders should maintain some caution while taking any fresh position, although the overall undertone is still bullish,” said Rakeshh Mehta, chairman at Mehta Equities.
Mehta said that the global markets will be highly focused and investors believe the Fed would give market incentices by hitting a pause on future rate hikes after recent macroeconomic data points.
“Nifty’s technical landscape is now suggesting a desired consolidation with interweek support at 19,171 mark. For index, the immediate hurdles are placed at 19,577 mark and then at 20,000 mark, while the 200 DMA is placed at 18,017 mark. Overall Nifty aims to reach 20K in the near term,” he added.
On the global front, Asian markets rallied today, following an overnight surge in Wall Street. US markets closed higher after the US consumer price index for June showed the smallest rise in more than two years.
