Sensex up 515 pts, Nifty tops 17,650 on lower-than-expected US inflation

CLOSING BELL

Stock market highlights: Lower-than-expected inflation in the US bolstered equities across the globe as investors turned to riskier assets. Hopes that the US Federal Reserve may go slow on its rate hike plan pumped up equities, cooled off bond yields, and supported the Indian rupee. The US retail inflation for July came in at 8.5 per cent, as against estimated 8.7 per cent, and 9.1 per cent in June.

"While the CPI continues to hover near a four-decade high, easing CPI figures reduced the probability of a 75-bps rate hike in the upcoming US FOMC meeting. Before this number came in, there was a 68 per cent probability that the Fed would hike another 75 bps in the next FOMC meeting. While we do understand these numbers are higher than the US Fed's comfort level of 2 per cent, the fact of the matter is that inflation has started inching downwards, giving great comfort to investors. That being said, with the way crude prices are declining, it could further ease by the time US inflation data comes in next month," said Sunil Damania, Chief Investment Officer, MarketsMojo.

Back home, the S&P BSE Sensex surged 515 points, or 0.88 per cent, to end at 59,332. The Nifty50, meanwhile, advanced 124 points, or 0.71 per cent, to settle at 17,659.

Axis Bank, IndusInd Bank, HDFC, Tech M, Bajaj Finance, SBI, and Wipro added over 2 per cent each, while TCS, Kotak Bank, Titan, ICICI Bank, Infosys, and HCL Tech rallied between 1 and 2 per cent. On the flipside, Tata Consumer Products, Apollo Hospitals, ITC, NTPC, Airtel, and HUL were the top laggards.

From sectoral viewpoint, the Nifty PSB index gained the most, up 2.3 per cent, followed by the Nifty IT index, up 1.8 per cent. 

Meanwhile, in the broader market, the BSE MidCap and SmallCap indices edged between 0.5 per cent and 0.8 per cent higher.

Global markets

European markets were mixed on Thursday as investors assessed their monetary policy expectations after a cooler-than-expected US inflation print, and digested a raft of corporate earnings. The pan-European Stoxx 600 hovered 0.1 per cent higher in early trade, with oil and gas stocks climbing 1.4 per cent while basic resources fell 0.7 per cent. 

Shares in Asia-Pacific, too, climbed. Hong Kong's tech-heavy Hang Seng index led gains, up 2.4 per cent, as the tech sector benefited from the prospect of less aggressive interest rate hikes.

US stock futures ticked up to 0.3 per cent higher in early premarket trade as Wall Street looks to build on a surge that took the S&P 500 to its highest point since early May.