Markets Rebound as Inflation Eases, India Favoured Again
The Indian stock market bounced back in a big way on Wednesday, as the retail inflation rate fell to 3.16%, leading to a surge in metal and IT stocks. The Sensex rose by 182 points, while the Nifty gained 88 points. The mid and small-cap indices also outperformed, with the Nifty Midcap 100 and Smallcap 100 rising by 1.4% and 2.3%, respectively.
The positive sentiment was further boosted by a soft dollar and easing global oil prices. The Indian rupee also appreciated against the US dollar, which helped to attract foreign funds into the market.
Fund managers were also optimistic about the Indian market, picking it as Asia’s top stock market. According to a report, India is expected to be the top performer in Asia in the coming year, with the Sensex expected to rise by around 15%.
One of the main reasons for the rally in the Indian market is the sharp decline in retail inflation. The retail inflation rate fell to 3.16% in October, which is the lowest level in over a year. This decline in inflation has led to a surge in demand for goods and services, which has in turn boosted the stock market.
The metal and IT sectors were among the top performers on Wednesday, with stocks such as Hindalco, Tata Steel, and TCS rising by up to 5%. The pharma sector also saw strong gains, with stocks such as Sun Pharma and Dr. Reddy’s rising by up to 4%.
The mid and small-cap indices also outperformed, with the Nifty Midcap 100 and Smallcap 100 rising by 1.4% and 2.3%, respectively. This is a positive sign for the market, as it indicates that investors are willing to take on more risk and invest in smaller companies.
The soft dollar also had a positive impact on the market. A soft dollar makes it cheaper for foreign investors to buy Indian stocks, which can attract more foreign funds into the market. The Indian rupee also appreciated against the US dollar, which helped to boost the market.
The easing of global oil prices also had a positive impact on the market. The price of crude oil has been falling in recent weeks, which has helped to reduce the burden on the Indian economy. The decline in oil prices has also led to a decline in the inflation rate, which has helped to boost the stock market.
In conclusion, the Indian stock market rebounded strongly on Wednesday, as the retail inflation rate fell to 3.16%. The metal and IT sectors were among the top performers, while the mid and small-cap indices also outperformed. The soft dollar and easing global oil prices also had a positive impact on the market. Fund managers were also optimistic about the Indian market, picking it as Asia’s top stock market.
Sources:
https://www.thecore.in/podcasts/markets-claw-back-after-a-roller-coaster-ride-835290
