Indian stock markets opened on a positive note Thursday, buoyed by favourable inflation data that indicated a significant drop in the Consumer Price Index (CPI) for February. The benchmark indices surged in early trade, with the S&P BSE Sensex climbing 71.85 points to reach 74,101.61, and the NSE Nifty50 rising by 23.80 points to 22,494.30 at 9:20 AM.
The recent CPI data, which showed a decline to 3.75% in February—its lowest in seven months—boosted market sentiment. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the domestic macroeconomic landscape is highly favourable, with inflation falling below the Reserve Bank of India’s (RBI) target of 4%. He also pointed to the increase in the Index of Industrial Production (IIP), which jumped to an 8-month high of 5.01% in January, reinforcing a positive growth-inflation balance. This trend suggests a potential interest rate cut by the RBI in the upcoming monetary policy committee (MPC) meeting in April.
However, despite the positive domestic indicators, Dr. Vijayakumar cautioned that global challenges, such as escalating trade tensions, could limit the market’s potential. Trade wars, particularly the ongoing tariff disputes between the U.S. and other countries, could weigh on the global economic outlook, which in turn might dampen investor enthusiasm in Indian markets.
In individual stock movements, IT stocks saw a boost, benefiting from cooler-than-expected U.S. inflation data, which provided temporary relief to companies with significant U.S. revenue exposure. Meanwhile, IndusInd Bank’s shares gained more than 2% in early trading.
Global markets also showed positive momentum, with Asian equities gaining ground after a rebound on Wall Street, supported by the latest U.S. inflation figures. Japan, Australia, and U.S. futures all indicated upward movement, signalling a recovery from earlier losses.
