Indian Stock Markets Rise After U.S. Inflation Data Shows Improvement
New Delhi [India], September 12: Indian stock markets opened with gains on Thursday, following a global rally in stocks after U.S. inflation data showed moderation in August.
Market Performance
The Nifty 50 index opened with a gain of 0.57% or 141.20 points, at 25,059.65 points, while the BSE Sensex surged 0.5% or 407 points, to 81,930.18 points. Global markets responded positively to the U.S. inflation data, increasing the chances of Fed rate cuts on September 18th.
Expert Opinion
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “Latest US inflation numbers are mildly positive for markets. August CPI inflation coming at 0.2% has brought down the 12-month inflation to 2.5% from 2.9% earlier. This paves the way for a rate cut by the Fed in September. But since core inflation continues to remain high at 3.2%, the Fed is likely to be cautious and refrain from a 50bp rate cut, finally settling for a 25bp rate cut.”
He added, “CPI inflation in India also is expected to be low at around 3.5% in August. This can facilitate a rate cut by the MPC in 2024 itself. In brief, the benign inflation conditions and prospects for rate cuts are positives for stock markets.”
Sectoral Indices
On the National Stock Exchange, all broad market indices opened in the green, including the Nifty Next 50 and Nifty 100. Among sectoral indices, Nifty Metal and Nifty PSU Bank emerged as leaders, with gains of 1.29% and 0.23%, respectively. However, shares of Tata Motors continued to face pressure, declining by around 0.5%.
IPO and Asian Markets
Meanwhile, the Bajaj Housing Finance IPO received a record Rs 3.23 lakh crore in application money from 89 lakh investors. Asian markets also opened strong on Thursday. Japan’s Nikkei 225 index surged around 2.7% with strong buying sentiment, while Taiwan’s Taiwan Weighted index gained more than 3%. South Korea’s KOSPI and Hong Kong’s Hang Seng also gained, following the rally in Asian stocks.
U.S. Market Reaction
In the U.S., markets saw gains on Wednesday, with the S&P 500 and Nasdaq indices rising more than 1% and 2.17%, respectively, after U.S. inflation data showed annual inflation falling to 2.5% in August.
Doubts Revealed
Stock Markets -: Stock markets are places where people buy and sell shares of companies. In India, the main stock markets are the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
U.S. Inflation Data -: Inflation data shows how much prices for goods and services have increased in the U.S. over time. If inflation is lower, it means prices are not rising as fast.
Nifty 50 -: Nifty 50 is an index that shows the performance of 50 major companies listed on the National Stock Exchange of India.
BSE Sensex -: BSE Sensex is an index that shows the performance of 30 major companies listed on the Bombay Stock Exchange in India.
V K Vijayakumar -: V K Vijayakumar is a financial expert from Geojit Financial Services, a company that helps people invest their money.
Fed rate cut -: A Fed rate cut means the U.S. Federal Reserve (the central bank) might lower interest rates, making borrowing cheaper and encouraging spending.
Sectoral indices -: Sectoral indices track the performance of specific sectors, like metals or banks, in the stock market.
Nifty Metal -: Nifty Metal is an index that tracks the performance of metal companies listed on the NSE.
Nifty PSU Bank -: Nifty PSU Bank is an index that tracks the performance of public sector banks listed on the NSE.
Tata Motors -: Tata Motors is a major Indian automobile company that makes cars, trucks, and buses.
Nikkei 225 -: Nikkei 225 is an index that shows the performance of 225 major companies listed on the Tokyo Stock Exchange in Japan.
Taiwan Weighted index -: Taiwan Weighted index is an index that shows the performance of major companies listed on the Taiwan Stock Exchange.
