Sensex jumps 350 points, Nifty tops 22,300 as US inflation data spurs rate cut hopes

U.S. data on Wednesday showed the consumer price index (CPI) rose by 0.3% in April, below an expected 0.4% gain. Markets are now pricing in two rate cuts in 2024, with a 25 basis point cut expected in September, according to the 's FedWatch tool.

The , sensitive to U.S. interest rates, surged by 1.6% as Indian generate a substantial portion of their revenue from the United States. Leading the index gains were , , and .

Meanwhile, barring Pharma, all sectoral indices opened higher. Bank, Financial Services, Metal, Realty, Consumer Durables, and Oil & Gas opened 0.5-1% higher.

Among individual stocks, fell 10% in early trade after the firm reported a fourth-quarter profit drop on softer steel prices.

Titagarh Rail Systems surged 9% after the company's consolidated net profit jumped 63.7% YoY to Rs 78.9 crore in the quarter-ended March.

Experts Take
"India’s underperformance is likely to change soon with clarity on election results. DIIs, HNIs and retail can turn aggressive buyers lifting the market sharply. FIIs can’t afford to miss this potential rally. The only risk is political instability after elections which appears a very low probability event now," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Meanwhile the global market construct continues to be supportive with the US indices setting new records. The decline in US CPI inflation in April to 3.4% sets the stage for a by the Fed, Vijayakumar said.

Deven Mehata, Research Analyst at Choice Broking, said, "Nifty can find support at 22,150 followed by 22,100 and 22,000. On the higher side, 22,300 can be an immediate resistance, followed by 22,350 and 22,400."

Global Markets
Wall Street's three major indexes notched record closes on Wednesday with the benchmark S&P 500 and the Nasdaq both advancing more than 1%, after a smaller-than-expected rise in consumer inflation bolstered investors' hopes for interest rate cuts by the Federal Reserve.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.44%. Hong Kong's Hang Seng advanced 0.9%, while Australia's stock benchmark rallied 1.5%.

FII/DII Tracker
FIIs sold shares worth Rs 2,832.83 crore. DIIs pumped in Rs 3,788.38 crore worth of stocks on May 15.

Crude Oil
Oil prices extended gains from the previous session on Thursday on signs of stronger demand in the U.S.

Brent futures rose 35 cents, or 0.4%, to $83.10 a barrel, while U.S. West Texas Intermediate crude (WTI) gained 40 cents, or 0.5%, to $79.03.

Rupee Gains
The Indian rupee rose slightly on Thursday, aided by a drop in U.S. bond yields and a weaker dollar after soft U.S. inflation data boosted hopes that the Federal Reserve may begin easing policy rates from September.

The rupee was at 83.46 against the U.S. dollar as of 09:40 a.m. IST, up from its previous close at 83.50.

(With inputs from agencies)