Benchmark indices up after below-estimate US inflation data
Mumbai, August 11, 2022
Benchmark indices ended up on Thursday on improved sentiments of investors after US inflation data for July came below estimates, raising hopes that US Fed will be slow on rate hike.
At close, the BSE Sensex ended up 515.31 points or 0.88 per cent at 59,332.60, while the NSE Nifty ended 124.25 points or 0.71 per cent higher at 17,659.00.
On the BSE, 1,843 shares advanced, 1,548 declined while 144 remained unchanged. Axis Bank, Bajaj Finance, HDFC, Tech Mahindra and TCS were the top gainers on the BSE on Thursday.
The BSE smallCap rose 0.83 per cent, midcap was up 0.52 per cent, while largecap rose 0.75 per cent.
"Investors cheered the US inflation data for July, which came in below the estimate and raised hopes that the Federal Reserve may not be that aggressive in hiking interest rates in its next meeting. Hence, the optimism spread across Asian markets, including India where investors lapped up banking, IT and realty stocks.
"Traders have also been drawing comfort from the falling crude oil prices and FII inflows into the local shares in the last few sessions," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
US CPI rose by 8.5 per cent vs expectations of 8.7 per cent during the year to July versus a 9.1 per cent annual expansion in June. More relevantly, the core reading held steady at 5.9 per cent, better than the uptick towards 6.1 per cent anticipated.
Money market traders immediately priced in a higher probability for a 50-basis point hike at the Federal Reserve's next rate revision meeting on September 21.
Asian stocks ended higher on Thursday following the gains on the Wall Street as softer-than-expected US inflation data prompted bets of less aggressive rate hikes from the Federal Reserve.
The Hang Seng index rose 2.4 per cent, while the Shanghai Composite Index gained 1.6 per cent.
"Global shares edged higher on Thursday as investors bet on the pace of interest rate hikes slowing after data pointed to inflation peaking. European shares, however, gave up early gains as investors digested comments from Federal Reserve officials who remained resolute on the need for further interest rate hikes. Most Asian indices closed at three-month highs," said Deepak Jasani, Head of Retail Research, HDFC Securities.