Stock market: Sensex up 1,200 pts from day’s low; Nifty tops 22,400; here’s why 

Benchmark indices the BSE Sensex and the NSE Nifty saw a sharp rebound in fag-end of Thursday’s trade, the weekly F&O expiry day, as bets of US rate cuts in 2024 grew stronger. The BSE Sensex, which were trading in the red earlier today, climbed 1,138 points from day’s low while Nifty topped 22,400 level within a short span. India was no exception.

Hong Kong’s Hang Seng jumped 1.6 per cent; Japan’s Nikkei surged 1.6 per cent while Korea’s Kospi was up 0.8 per cent today. It was all on excepted lines after the US inflation overnight allayed investor concerns.

Mahindra & Mahindra led the Sensex gainers, rising 3.93 per cent to Rs 2,393 after better-than-expected Q4 results. Bharti Airtel climbed 2.38 per cent to Rs 1,342.95 on hopes the telecom operator will soon be hiking tariffs post general elections. Tech Mahinda Ltd (TechM), Titan Company Ltd and Infosys Ltd climbed over 2 per cent each.

“Moderating US inflation; soft US retail sales should bring a relief for Asian stocks, in our view,” said Nomura said earlier today.

The widely watched US Core CPI MoM for April came in line with expectations at a rounded 0.3 per cent MoM, moderating from March’s 0.4 per cent. The super Core CPI moderated to 0.42 per cent MoM and rental inflation ticked down slightly to 0.42 per cent. 

Fear gauge India VIX eased 1.36 per cent to 20 level. This was the third day of fall for the index. The index suggests volatility over the next 30 days.

The US also reported retail sales data that came in softer against expectations.

“We think this data should ease recently emerging market concerns of ‘higher for longer’ rates and should therefore bring relief for Asian stocks. Looking forward, our US team notes that the lead indicators suggest the moderation in rents is likely to continue through 2H of the year, and the recent moderation in labor data point to a further slowdown in supercore services,” Nomura India said.

BofA Securities said the April CPI report was broadly in-line with its expectations.

“Based on today’s CPI and PPI report, we expect core PCE inflation to print at 0.23 per cent MoM in April. While the inflation data are a step in the right direction, it is one report. We retain our call for the first cut in December,” BofA Securities.