Positive sentiment towards macroeconomic data led to a lift in Indian equities, helping the rupee gain significant ground against the dollar. The Indian currency appreciated 19 paise in Thursday morning trade, while both Nifty and Sensex inched up.
On Wednesday, the Centre posted that the country’s CPI-based retail inflation slid to 3.61 per cent in February—a seven-month low—leading to speculations of a prospective rate cut by the Reserve Bank of India in April.
The data from the National Statistics Office (NSO) further added to the uptick in sentiment, with the Index of Industrial Production (IIP) jumping to 5 per cent. IPP is a measure of the performance of industries.
On account of these, the BSE Sensex climbed more than 192 points and the NSE Nifty gained at least 21 points in morning trade. In the Sensex, Tata Steel, Bajaj Finserv, ICICI Bank, Bajaj Finance, SBI, Zomato, Airtel, PowerGrid, NTPC, and Titan gained significant ground, while IndusInd Bank, ITC, UltraTech, Asian Paints, Tata Motors, Axis Bank, Mahindra and Mahindra, and Nestle India lagged.
“The domestic macros are highly positive,’ stated V.K. Vijayakumar of Geojit Financial Services, “The market will be moving in the midst of domestic tailwinds and global headwinds on Thursday.”
Easing prices of eggs, vegetables, and other protein-rich items led to a major cut in CPI-based retail inflation. If the Trump factor was absent, such positive macro data would have lifted the markets significantly, according to analysts.
However, Donald Trump’s recent action kept investors in dread of an impending trade war. The EU and Canada retaliated to the US by slapping tariffs on imported goods from the US. China is expected to follow suit, according to Vijayakumar.
