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Indian stock indices settled sharply higher on Wednesday, tracking robust cues from US peers and strong domestic market fundamentals. At the closing bell, Sensex settled at 85,609.51 points, up a whopping 1,022.50 points or 1.21 per cent. Nifty closed at 26,205.30 points, up 320.50 points or 1.24 per cent, respectively.
"Indian markets staged an impressive rally on Wednesday, with broad-based buying across sectors reflecting the sharp risk-on sentiment in global equities," said Ponmudi R, CEO of Enrich Money. "The upmove was supported by growing expectations of a U.S. Federal Reserve rate cut in December, after the latest U.S. economic releases -- including September retail sales and producer price data -- signalled softening demand and cooling inflation." All sectoral indices soared today, with metal, consumer durables, oil and gas leading the pack, NSE data showed. According to Vinod Nair, Head of Research, Geojit Investments Limited, domestic equities experienced significant gains, driven by what he termed the festive "Santa Claus rally" in global markets. "This uptrend was fuelled by robust retail and domestic institutional investor (DII) inflows, while foreign institutional investor (FII) flows remained modest. On a global scale, market sentiment improved with rising expectations of a U.S. Federal Reserve rate cut in December, alongside softer U.S. yields and a weaker dollar," Nair noted. On the domestic policy front, the Reserve Bank of India (RBI) is widely anticipated to implement a 25-basis-point rate cut in December, supported by moderating inflation and a dovish stance, which, again, according to Nair, is a stock market positive. In the morning today, the pressure in the Indian stock market continued from the previous session as both the benchmark indices opened in the red. However, shortly after the opening, the markets recovered and moved back into the green, taking positive cues from other global markets. Global cues were also supportive. Despite a decline in Nvidia, US markets gained on Tuesday on rising expectations of a rate cut in December. Weak retail sales and weak private payrolls data strengthened the case for a possible Fed rate cut on December 10th. "The rally was supported by a mix of domestic and global cues. Renewed optimism over a potential rate cut by the US Federal Reserve in December, along with expectations of a 25-basis-point repo rate cut by the Reserve Bank of India early next month, improved investor sentiment. Additionally, easing crude oil prices--driven by hopes of progress toward peace between Ukraine and Russia--provided further support," Ajit Mishra - SVP, Research, Religare Broking Ltd, said. (ANI)
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