Markets Open Higher As Inflation Cools; Geopolitical Concerns Ease

Indian benchmark indices opened on a positive note on Wednesday, buoyed by a sharp fall in retail inflation and a cooling of geopolitical tensions.

By 9:25 AM, the BSE Sensex had gained 414 points, or 0.51%, to reach 81,562, while the NSE Nifty rose 136 points, or 0.55%, to 24,712.

Broad-based buying was visible across the board, particularly in midcap and smallcap segments.

The Nifty Midcap 100 index advanced 510 points, or 0.92%, to 56,030, and the Nifty Smallcap 100 climbed 132 points, or 0.78%, to 17,035.

All sectoral indices were, however, trading in positive territory. Among the notable gainers were auto, IT, PSU bank, FMCG, metal, energy, infrastructure, and PSE sectors.

“After a positive opening, Nifty can find support at 24,500 followed by 24,400 and 24,300. On the higher side, 24,700 can be an immediate resistance, followed by 24,800 and 24,850,” said Hardik Matalia of Choice Broking.

Key performers in the Sensex basket included:

• Tata Steel,
• Bharti Airtel,
• Tech Mahindra,
• Infosys,
• Eternal,
• HCL Tech,
• M&M,
• Bajaj Finserv,
• L&T,
• TCS,
• SBI, and
• NTPC

Conversely, Tata Motors, Asian Paints, IndusInd Bank, HUL, Nestle, and Kotak Mahindra Bank were among the laggards.

India’s retail inflation for April declined to 3.16% from 3.34% in March, marking the lowest reading since July 2019.

“With crude oil prices sharply easing, domestic demand softer, and food prices contained, we expect the RBI to cut rates aggressively,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

Asian markets, however, showed mixed trends. Hong Kong, Shanghai, Seoul, and Jakarta were trading higher, while Japan and Bangkok remained in negative territory.

On Wall Street, US markets ended mixed on Tuesday. The Dow Jones closed in the red, while the tech-heavy Nasdaq gained for a second consecutive day, supported by lower-than-expected inflation data.

Foreign institutional investors (FIIs) were net sellers, offloading equities worth Rs 476 crore on 13 May.

In contrast, domestic institutional investors (DIIs) continued their buying streak for a third straight day, purchasing shares worth Rs 4,273 crore.

Also Read: Foreign Investors Pump Over Rs 14,000 Crore Into Indian Equities In May