Sensex, Nifty close higher on cooling inflation data; PSU banks, metal stocks top gainers

• Sensex closed 303 points or 0.51% higher at 60,261 points while Nifty50 ended 98 points or 0.55% higher at 17,956.
• Cooling inflation in both the US and India also provided some relief to investors, with the central banks of both the countries expected to slow down the pace of rate hikes.
• Indices moved higher led by gains in shares of PSU banks, metals and IT.

India’s benchmark indices Sensex and Nifty50 end higher led by gains in shares of PSU banks, metals and IT sectors.

Sensex closed 303 points or 0.51% higher at 60,261 points while Nifty50 ended 98 points or 0.55% higher at 17,956.

Except FMCG and pharma, all other sectoral indices were in green on Friday with PSU Bank surging 1.35%, metals rising 1.27% and IT up 0.74%.

“Overall the global sentiments are turning positive due to decelerating inflation pressures, which along with better than expected domestic economic data and stable IT results could give support to the markets and help to move higher,” said Siddhartha Khemka, head - retail research at Motilal Oswal Financial Services.

Further, analysts say that banking will be in focus next week as HDFC Bank will announce its Q3 earnings on Saturday.

“Nifty traded negative in the first half, despite positive US and India inflation data. Buying emerged in the second half taking the Nifty higher to end with gains of 92 points (0.5%) at 17952 levels. Broader markets however closed on a mixed note,” added Khemka.

Meanwhile, foreign institutional investors (FIIs) sold ₹2,422 crore worth of equities on Friday while domestic institutional investors (DIIs) bought equities worth ₹1,953 crore.

Cooling inflation in both the US and India also provided some relief to investors, with the central banks of both the countries expected to slow down the pace of rate hikes. The core consumer price index (CPI) inflation in the US fell 0.1% in December when compared to November, driven by falling energy prices.

In India, there was double delight of a further cool down in retail inflation (CPI), and an increase in industrial growth, measured by Index of Industrial Production (IIP).

CPI inflation cooled down to 5.72% in December from 5.88% in November, marking the second consecutive month of inflation being under the Reserve Bank of India’s upper tolerance limit of 6%. IIP accelerated to 7.1% in November, from 4.2% in October.

Rupee depreciated by 4 paise to close at 81.34 against the US dollar on Friday, tracking a rebound in crude oil prices and sustained foreign fund outflows. Brent crude oil rose above $84 per barrel on Friday.

US markets cheer cooling inflation, Asian markets largely positive
Markets in the US cheered the cooling inflation which has raised hopes of the US Fed going slow on rate hikes. The benchmark S&P 500 closed 0.34% up, while the Dow Jones Industrial Average rose 0.64% on Thursday. The tech-heavy Nasdaq gained 0.64%.

In Asia, markets were largely positive on Friday morning, led by Hang Seng which was up 1.04% followed by Shanghai Composite Index up 1.01%, KOSPI up 0.89%,

Taiwan Weighted index was up 0.63%. On the other hand, Nikkei 225 was down 1.25%.

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