Sensex up 300 pts, Nifty above 24,600: US CPI-led global rally among key factors behind market rise

Sensex, Nifty rise in Wednesday's trading session. 

The equity benchmark indices advanced on Wednesday, tracking firm global markets and easing domestic retail inflation data.

Sensex climbed 304.32 points or 0.38 percent to settle at 80,539.91. During the day, it jumped 448.15 points or 0.55 percent to 80,683.74. The Nifty edged up by 131.95 points or 0.54 percent to 24,619.35.

Apollo Hospitals Enterprise, Hindalco Industries, Hero MotoCorp, HDFC Life Insurance Company and Kotak Mahindra Bank were among the major gainers in the Nifty pack today, rising up to 6 percent.

Key factors behind market rise today

1) Retail inflation drops: Retail inflation eased to an eight-year low of 1.55 percent in July, falling below the Reserve Bank's comfort zone for the first time since January 2019, aided by subdued food prices, according to government data released on Tuesday. The softer reading supported a positive trend in domestic equities.

"Nifty and Bank Nifty traded with a bullish undertone as positive cues from lower CPI readings in India and steady US inflation boosted sentiment," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Stocks advance to record on Fed rate-cut bets: Markets wrap

2) Positive global cues: Asian markets were in positive territory, with South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite and Hong Kong's Hang Seng posting gains. US markets closed sharply higher on Tuesday.

Stock Market LIVE Updates

3) Trump-Putin Summit: Investor sentiment also improved ahead of the scheduled meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska on Friday to discuss the Russia-Ukraine conflict. "The Trump-Putin talks may provide a positive trigger, but there is no certainty about it," said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

4) Hopes of Fed rate cut hopes: Expectations of a Federal Reserve rate cut in September further buoyed markets after US consumer prices rose 0.2 percent month-on-month in July. The in-line inflation print pushed the probability of a September rate cut to 94 percent from 86 percent a day earlier, reported Reuters.

On the technical front, Anand James, Chief Market Strategist, Geojit Financial Services, said, "Despite the turn lower yesterday, we will stick to yesterday's view that a rush to the 200-day SMA, now positioned at 24,049, may not be seen unless 24,450 gives away. Expect an upswing attempt initially, but we will need a push above 24,560 to get back on to the 25,000 trajectory."

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.