Sensex up 200 pts, Nifty tests 25k; Health, Pharma, Consumer, Auto gain

Indian equity benchmark indices BSE Sensex and Nifty 50 open on a positive note on Thursday, following overnight gains in the US markets that was also driving other Asian markets, barring China, higher.

At 10:00 AM, the BSE Sensex was up 198 points, or 0.24 per cent, at 81,721, while the Nifty 50 had gained 69 points, or 0.28 per cent, at 24,987.

Meanwhile, the US markets reversed an earlier sell-off to close higher on Wednesday, and Brent crude prices rebounded from their three and a half year lows as a key inflation report cemented expectations that the US Federal Reserve will issue a 25-basis point rate cut next week.

Investors also parsed Tuesday night’s US Presidential debate to gauge potential policy shifts after the November election.

All three major US stock indices pulled a U-turn, transforming a sell-off into a rally by mid-afternoon. Tech stocks, particularly chips, were clear outperformers, putting the Nasdaq ahead of the pack.

The Labor Department’s Consumer Price Index (CPI) showed the annual inflation rate CPI shed 0.4 percentage points to a cooler-than-expected 2.5 per cent. The core measure – which excludes food and energy – posted a hotter-than-expected monthly gain of 0.3 per cent, and an annual increase of 3.2 per cent.

At last glance, financial markets have baked in an 85 per cent probability that the Fed will cut its key policy rate by 25 basis points at next week’s policy meeting, with a dwindling 15 per cent chance of a double-sized 50 bp cut, according to CME’s FedWatch Tool.

Market participants also paid close attention to late Tuesday’s US presidential debate, listening closely for potential policy clues from Vice President Kamala Harris and former President Donald Trump.

That apart, investors in India would have their eyes peeled for index of industrial production (IIP) for July and August’s consumer price index (CPI) set to be released late on Thursday. Economists polled by Reuters expect CPI to rise 3.5 per cent year-on-year, compared to 3.54 per cent in July.

The Dow Jones Industrial Average rose 124.75 points, or 0.31 per cent, to 40,861.71, the S&P 500 gained 58.6 points, or 1.07 per cent, to 5,554.12 and the Nasdaq Composite added 369.65 points, or 2.17 per cent, to 17,395.53.

European stocks ended the session essentially flat as investors shifted their focus to the European Central Bank and its rate decision expected on Thursday.

The pan-European STOXX 600 index rose 0.01 per cent and MSCI’s gauge of stocks across the globe gained 0.62 per cent.

Following that, markets in the Asia-Pacific region opened higher on Thursday. Japan’s Nikkei 225 jumped 3 per cent in early trades and Topix gained 2.48 per cent.

South Korea’s Kospi opened 1.2 per cent higher and the small cap Kosdaq advanced 2.5 per cent. Australia’s S&P/ASX 200 jumped 0.6 per cent, meanwhile, Hong Kong’s Hang Seng index futures were at 17,194, higher than the HSI’s last close of 17,108.71. Futures for mainland China’s CSI 300 stood at 3,181.6, lower than its Wednesday close at 3,186.13.

Oil prices steadied after Tuesday’s sell-off as a drop in US crude inventories and potential supply disruptions from Hurricane Francine balanced against concerns over softening global demand.

US crude jumped 2.37 per cent to settle at $67.31 per barrel, while and Brent settled at $70.61 per barrel, up 2.05 per cent on the day.

Gold prices dipped as hopes dimmed for a larger interest rate cut from the Fed at next week’s policy meeting. Spot gold dropped 0.2 per cent to $2,512.30 an ounce.