Indices rally over 1% on positive global cues 

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Indian benchmark indices ended higher on Wednesday amid positive global cues on favourable US inflation data.

The Sensex ended 742 points or 1.14 per cent higher at 65,675, and the Nifty gained 232 points or 1.19 per cent at 19,675.

Eicher Motors (5.5 per cent), Tech Mahindra (3.7 per cent), Hindalco (3.7 per cent), Tata Motors (2.8 per cent) and Infosys (2.7 per cent) were among the top gainers on the Nifty. Losers included Bajaj Finance, down 1.8 per cent, and Power Grid Corporation and IndusInd Bank, which shed more than a per cent each.

Almost all the major sectoral indices traded in the positive territory with IT, Realty, Oil & Gas and Auto being the top gainers. Broad market indices rose less than the Nifty even as the advance-decline ratio rose to 1.65:1.

“The market’s strong gap-up jump in response to positive global cues on account of the softer than anticipated US and UK’s inflation data, highlights the optimism for an end to the interest rate cycle, as evidenced by the ease in bond yields. This is likely to draw FII flows into emerging markets, which is good for India considering the current better earnings season and the festival demand pick-up,” said Vinod Nair, Head of Research at Geojit Financial Services.

FPIs bought shares worth ₹550 crore on Wednesday, provisional data showed. The investors have sold shares worth nearly $5 billion since September.

Trade data

India’s retail inflation declines to 4-month low of 4.87 per cent in October. A surge in gold imports took the country’s trade deficit for October to a record high. The October merchandise exports came at $33.57 billion, up from $31.60 billion in October last year, while the merchandise imports stood at $65.03 billion, 11 per cent higher than $57.91 billion last year.

Global indices extended gains on Wednesday, as expectations of an end to a global rate hike cycle spurred on investors following benign inflation readings in the US and the UK. Signs of China’s economic resilience also helped. China’s retail sales rose 7.6 per cent in October and its industrial output grew 4.6 per cent in October year-on-year, accelerating from the 4.5 per cent pace seen in September.

Among Asian peers, Hang Seng and Nikkei 225 led the rally, with gains of 3.9 per cent and 2.5 per cent, respectively. European indices were trading firmly in the green.

“The short-term trend of the Nifty remains positive. Having moved above the key resistance of around 19,600 levels, there is a possibility of Nifty advancing towards the next set of hurdles of around 19,850 and the next 20,050 levels in the near term. Any dips down to the immediate support of 19,500 could be a buy on dips opportunity,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.