Sensex recovers on lower inflation

Lower inflation data coupled with revived global sentiment helped benchmark Sensex bounce back after Thursday’s steep fall and end 30 points higher at 27,673.60 in a choppy trade on Friday, but gains were restricted by a mixed start of the earnings season.

Investor sentiment received a boost after retail inflation fell to a 13-month low of 4.31 per cent and wholesale inflation at 3.57 per cent, creating headroom for further rate cuts by Reserve Bank in coming months.

Besides positive domestic macroeconomic data, a firming trend in global markets with upbeat Chinese inflation data easing investor concerns over global growth and the health of the world’s second-biggest economy influenced trading sentiment here.

“Market was not cheered even though the Consumer Price Index (CPI)-based inflation cooled to 4.31 per cent as the mixed start to the quarter results did not comfort investors. Global market rebounded with the positive inflation data from China, while the investors are eyeing today’s commentary from Fed chair for any cues in rate hike trajectory,” Vinod Nair, head of research, Geojit BNP Paribas Financial Services, said.

The 30-share barometer opened positive at 27,712.22 and advanced to 27,763.54, but profit-booking at higher levels, shed most grounds to settle the session 30.49 points, or 0.11 per cent, higher at 27,673.60. Intra-day, it touched a low of 27,548.18.

The gauge had plunged 439.23 points in Thursday’s trade after a slew of global factors such as weak Chinese export data and Fed rate hike talks unnerved investors.

On similar lines, the NSE Nifty rose 10.05 points, or 0.12 per cent, at 8,583.40 after shuttling between 8,604.45 and 8,549.80. However, for the week, the Sensex dropped 387.54 points, or 1.38 per cent, while NSE Nifty lost 114.20 points, or 1.31 per cent.

The broader markets on Friday, too, saw some buying activity with the BSE small-cap advancing 0.83 per cent and mid-cap ending higher by 0.81 per cent.

Shares at other Asian bourses ended higher and so did European bourses in their early session. Key indices in Hong Kong rose 0.88, while Japan’s Nikkei gained 0.46 per cent. Shanghai Composite rose 0.08 per cent.