Markets set new highs as inflation numbers cheer

The markets fell back on better than expected quarterly earnings, which came as a feel-good factor

The Sensex and the Nifty on Monday made the most of the inflation numbers as they scaled fresh life highs at 30,322 and 9,445, respectively, shrugging off fears over a potential impact of a ransomware attack.

The markets also fell back on better than expected quarterly earnings, which came as a feel-good factor.

Retail inflation rate fell sharply to a multi-year low of 2.99 per cent in April and the Wholesale Price Index (WPI) slipped to a four-month low of 3.85 per cent, creating headroom for the Reserve Bank of India to act in coming months.

The 30-share barometer jumped to an all-time high of 30,322.12, up 133.97 points, or 0.44 per cent, shattering the previous record closing of 30,250.98 touched on May 11.

The gauge had eased 63 points on Friday.

The Nifty stayed with the trend as well, which rebounded 44.50 points, or 0.47 per cent, to bring up a fresh life high of 9,445.40, surpassing the previous 9,422.40 hit on May 11.

The rupee hit a high note at 64.05 against the dollar, a fresh 21 month-high, which fuelled the upmove.

Over the weekend, the ransomware WannaCry hit systems in about 150 countries, including Russia and the UK, in one of the most widespread cyber attacks in history.

“Consumer goods sector gave impetus to the market in the opening hours, against the backdrop of a positive inflation data, and India Meteorological Department’s comment on monsoon arrival at the Andaman and Nicobar ahead of expectations. But the concerns on cyber security kept risk appetite on a leash,” said Anand James, chief market strategist at Geojit Financial Services.

Another set of disappointing US economic figures and below-par Chinese output data tempered the gains.

Tata Steel stock was in the lead, up 4.35 per cent, ahead of quarterly earnings due on Tuesday, followed by Dr Reddy's, which rose 3.54 per cent.