Nifty, Sensex poised for gain as US inflation data spurs global surge

Stock market news: Indian equities are anticipated to commence on a positive note on Thursday, taking cues from a surge in global markets after a US consumer inflation report came in softer than anticipated, heightening expectations of at least two interest rate cuts in 2024.

The Gift Nifty was observed trading at 22,386.50 as of 8:19 am, indicating that the Nifty 50 will likely open above Wednesday's closure of 22,200.55.

Overnight, Wall Street benchmarks hit record highs as US consumer prices exhibited a less-than-anticipated increase in April, signaling a resumption of a downward trajectory in inflation.

Buoyed by the inflation figures, other Asian markets also rallied, while US Treasury yields and the dollar experienced a retreat.

Yogesh Kansal, co-founder of the global investing platform Appreciate, said, "The US inflation report should be music to the ears for equity markets."

Presently, markets are factoring in two rate cuts in 2024, with a 25 basis point reduction expected in September, according to the CMEGroup's FedWatch tool.

Of particular focus will be the US-rate sensitive information technology sector, given that Indian IT firms derive a substantial portion of their revenue from the United States. The index concluded Wednesday's session with a marginal decline of 0.02 per cent, halting a two-day winning streak.

Since the beginning of the week, the Nifty 50 has advanced by 0.66 per cent, while the S&P BSE Sensex has gained 0.44 per cent, rebounding from a 2 per cent dip last week amid heightened volatility and consistent foreign selling.

Stocks in focus

• Jindal Stainless: India's leading stainless steel manufacturer by volumes reports a decline in fourth-quarter profits due to softer steel prices.
• TVS Motor: The company announces the commencement of operations in Italy.
• Key Earnings Reports: Mahindra & Mahindra, Hindustan Aeronautics Ltd, Biocon.