The Indian benchmark indices, Sensex and Nifty surged in the first half of Thursday driven by India’s better-than-expected inflation data, which sparked optimism for a potential rate cut by the RBI. However, the momentum was short-lived as the benchmarks lost their steam and ended the day flat in the second half.
At the close, the Sensex was down by 32 points, or 0.04 per cent, at 76,138, while the Nifty fell by 25 points, or 0.1 per cent, to 23,019. Of the total shares, 1,672 advanced, 1,873 declined, and 96 remained unchanged.
Among Nifty 50 stocks, Adani Enterprises, Hero MotoCorp, Adani Ports, ONGC, and Infosys were the biggest laggards. On the other hand, Sun Pharma, Bajaj Finserv, Tata Steel, Bajaj Finance, and Cipla were the top gainers.
Sectorial Update
Excluding Nifty Pharma, Metal, Realty, Private Bank, and Media, the remaining eight sectoral indices ended in the red.
The Nifty Metal index gained 0.8 per cent, following a statement by Union Minister for Heavy Industries, HD Kumaraswamy, suggesting a safeguard duty on steel imports.
India’s retail inflation eased to a five-month low of 4.3 per cent in January, down from 5.2 per cent in December, mainly due to falling food prices. This fueled hopes for further monetary easing by the Reserve Bank of India. However, these expectations were tempered by a hotter-than-expected US inflation report.
Trade war concerns persisted after US President Donald Trump threatened reciprocal tariffs on countries imposing duties on U.S. imports, heightening tensions ahead of his meeting with Indian Prime Minister Narendra Modi in Washington today.
Meanwhile, US consumer prices rose 0.5 per cent in January, pushing the annual inflation rate to 3 per cent, up from 2.9 per cent in December. Fed Chair Jerome Powell’s comments to the House Financial Services Committee indicated that the central bank’s battle with inflation is far from over, dampening hopes of near-term rate cuts.
