US Market surges on cooling inflation

The US stock market finished session modestly higher on Thursday, 12 January 2023, as risk sentiments strengthened on expectations of less aggressive interest rate hikes from the Federal Reserve in the coming months after data showing a drop in U.S. consumer prices inflation in the month of December.

The At the close of trade, the Dow Jones Industrial Average index advanced 216.96 points, or 0.64%, to 34,189.97. The S&P500 index added 13.56 points, or 0.34%, to 3,983.13. The tech-heavy Nasdaq Composite Index increased 69.43 points, or 0.64%, to 11,001.10.

Total 8 of 11 sectors ended higher along with the S&P500 Index. Energy was the top performing sector, rising 1.87%, followed by real estate (up 1.09%), communication services (up 0.83%), and information technology (up 0.72%).

 

The Labor Department said its consumer price index edged down by 0.1% in December after inching up by 0.1% in November. The report also showed the annual rate of consumer price growth slowed to 6.5% in December from 7.1% in November.

Excluding food and energy prices, core consumer prices rose by 0.3% in December following a 0.2% uptick in November. The annual rate of core price growth slowed to 5.7% in December from 6% in November.

The Labor Department also released a separate report showing first-time claims for U.S. unemployment benefits slipped to 205,000, a decrease of 1,000 from the previous week's revised level of 206,000.

The slower price growth eased concerns about the outlook for interest rates, although the Federal Reserve is still widely expected to raise rates by at least 25 basis points at its next meeting. The Fed raised the key rate by 50 basis points in December, after four back-to-back 75-bps hikes.

Philadelphia Fed President Patrick Harker and St. Louis Fed President James Bullard acknowledged the moderation in prices, but stressed on the need for further monetary policy tightening to bring inflation down to the central bank's target.

Shares of home goods retailer Bed Bath & Beyond Inc rose 20% again on Thursday despite a looming bankruptcy filing.

American Airlines Group shares advanced 5.5% after it raised its outlook for fourth-quarter profit, based on strong demand for travel during the holiday season.

Among Indian ADR, HDFC Bank was up 0.18% at $66.70, Wipro added 1.04% to $4.84, INFOSYS was up 1.553% at $18.44, WNS Holdings inclined 0.67% to $85.34, and Dr Reddy's labs added 1.48% to $53.37. ICICI Bank fell 0.28% to $21.39, Tata Motors sank 1.57% at $25.14, and Azure Power Global fell 7.16% to $4.28.

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