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The Indian benchmark equity indices, Sensex and Nifty, soared over 1.5% on Thursday, reaching fresh record highs, mirroring global gains. This surge was primarily driven by expectations of increased foreign investment in Indian equities fueled by the latest US inflation data. The data strengthened the likelihood of a 25 basis point Federal Reserve rate cut, boosting investor sentiment.
The BSE Sensex climbed 1,234 points, or 1.51%, to 82,757.36, while the Nifty50 surged 380 points, or 1.52%, to 25,342.50 by 3 pm. The benchmark surpassed its previous high of 25,333.7, signaling strong market momentum. Notably, the market capitalization of all listed companies on BSE surged by Rs 5.14 lakh crore, reaching Rs 465.9 lakh crore, reflecting the significant investor confidence.
US consumer prices saw a slight increase in August, with core inflation rising by 0.28%, exceeding expectations. However, the data also indicated some stickiness in underlying inflation. Despite this, market expectations of a 25-basis-point Fed rate cut on September 18 jumped to 85%, up from 66% the previous day, according to CME FedWatch. The probability of a more aggressive 50-bps cut dwindled to 15%.
Source: D-St investors add Rs 5 lakh crore as HDFC Bank, Airtel lift Sensex 1,400 points