 "equity market, stocks, share market")
Indian equity benchmarks continued their winning streak on Thursday amid gains in IT majors and positive sentiment created by expectations of peaking rate hikes in the West.
The Sensex ended the session at 65,982, gaining 306 points or 0.5 per cent. Nifty rose 89 points to end the session at 19,765, a 0.5 per cent gain.
Thursday's close is the highest for Sensex and Nifty in four weeks.
Foreign portfolio investors (FPIs) were the net buyers for a second day. On Thursday, they bought shares worth nearly Rs 960 crore, while domestic institutions two were net buyers to the tune of Rs 706 crore.
IT majors Infosys, TCS, and HCLTech contributed to Sensex gains. IT companies with significant exposure to the US rallied amid hopes that the US Federal Reserve and other major central banks are close to their rate-hiking campaign to tame inflation.
"They have been beaten down after their results, and it's a rebound from a lot of lower valuations," said Andrew Holland, CEO of Avendus Capital Alternate Strategies.
Equity markets are rising after a soft inflation reading in the US and UK this week.
The core consumer price index in the US, excluding food and energy costs, rose 0.2 per cent from September.
Equity investors in the US cheered it as a sign of the end of the rate hike by the US Federal Reserve (Fed), with some betting on a 50-basis point cut by July next year.
Similarly, inflation fell to its lowest in the UK in two years.
Consumer prices rose 4.6 per cent from a year earlier in October, down from 6.7 per cent in the previous month, the slowest pace since 2021 as energy prices fell.
The softer inflation numbers led to speculation that the Bank of England would cut rates as early as the middle of next year.
"Interest rates should peak. So, markets are looking at a positive scenario, and so far, data has supported their belief. The Goldilocks scenario is prices are cooling, but people are spending, so you have resilience, but inflation is coming down. So, interest rates can come down as well. The eyes will now be on the state elections in the next few weeks,” said Holland.
Market experts said the strong earnings momentum and growth expectations would give an additional fillip to equities to rise.
Analysts, however, have warned that inflation should fall more consistently before one can conclude the rate hikes have come to an end.
Investor focus will now shift to macro data from the US this week, as well as statements from Fed and European Central Bank officials.
“With the conclusion of the earning season, the focus has now shifted to global as well as domestic cues. Overall, we expect positive momentum to continue in the market with sectoral rotation, given the healthy macro data and receding global concerns. On economic data points, investors will look for Europe inflation data,” said Siddhartha Khemka, head of research of Motilal Oswal Financial Services.
The market breadth was mixed, with 1,959 advancing and 1,790 declining.
