The Sensex closed at 61,795.04, up 1,181.34 points, or 1.95%, from its previous close. The Nifty surged 321.50 points, or 1.78%, to close at 18,349.70. Both indices are now within 1% of their lifetime highs. The record level for the Sensex is 62,245.43 and 18,604.45 for the Nifty.
“We expect the euphoria in the Indian and global equity markets to sustain in the near term, and take our markets to new highs,” said Mayuresh Joshi, head equity research, William O’Neil India.
US consumer prices in October rose 7.7% – the slowest pace of annual increase since January, down from 8.2% in September and lower than the 7.9% estimated by economists. Overnight, Wall Street had its best day in more than two years, with the Dow Jones Industrial Average rising 3.7% and the tech-focused Nasdaq gaining 7.5%. This gave an impetus to Asian markets as key averages advanced 2-8% across the continent.
On Friday, the S&P 500 was up 0.26% and the Nasdaq was up 1.01% at the time of going to press. The Dow Jones was down 0.55%.
The circumspect consumer inflation reading in the US was a “welcome relief”, Dallas Federal Reserve President Lorie Logan said, while cautioning there is still “a long way to go”, Reuters reported Friday. The Federal Reserve last week raised the key policy rate by 75 basis points for the fourth consecutive time this calendar year.
Dollar Index
With the latest inflation print coming in lower than expected, market participants believe the pace of rate hikes by the US Fed would moderate. European markets were marginally in the green, having erased initial gains. The Stoxx Europe 600 was up 0.08% at close on Friday. “The policy measures taken by the US Fed are showing early signs that inflation is slowing. The Fed will continue in its trajectory of raising rates in the future meetings, but in smaller quantums. This should keep investor flows and sentiment positive for the markets,” said Joshi.
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