Indian stock markets opened positively on September 12, 2024, as investor sentiment was buoyed by expectations of a potential interest rate cut by the U.S. Federal Reserve following the release of the latest U.S. inflation data. The BSE Sensex surged by 361 points, or 0.4%, to reach 81,884, while the Nifty 50 climbed 117 points, or 0.5%, to touch 25,036 shortly after the market opened.
The optimism in the markets stems from the U.S. Consumer Price Index (CPI) data released on September 11, which indicated a slowdown in inflation to 2.5% in August, the lowest level since February 2021. This figure was below the expected 2.6%, leading to increased speculation about a 25-basis point rate cut by the Fed at its upcoming meeting on September 17-18. The probability of such a cut rose to 85%, while the likelihood of a more aggressive 50-basis point reduction diminished to 15%.
In the Indian markets, all 13 sectoral indices opened in the green, with the Nifty Metal and Nifty PSU Bank indices leading the charge, each up by approximately 1.5%. Notable gainers included Tata Steel, which rose by 3% following a significant funding agreement with the UK government, and Bharti Airtel, Hindalco, and Shriram Finance, which saw gains between 1-3%.
Market analysts are closely monitoring India’s CPI data, set to be released later in the day, as it could further influence monetary policy decisions. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that India’s inflation appears to be cooling, which may alleviate immediate concerns and support a favorable outlook for the stock market.
Overall, the positive opening reflects a combination of global cues and local market dynamics, setting a hopeful tone for investors as they navigate potential shifts in monetary policy.
