Sensex rebounds in tandem with risk sentiment ahead of India/ US CPI data

India’s Sensex fluctuates between gains and losses after opening in the green on Tuesday.
Sensex corrected further on Monday amid profit-taking before Tuesday’s key event risks.
All eyes remain on the US and Indian CPI inflation data slated for release later on Tuesday.

The Sensex 30, one of India’s key benchmark indices, is back in the green after giving up early gains on Tuesday, holding Monday’s trading range.

The upswing in the Gift Nifty futures suggested a positive start to Tuesday’s trading for Sensex. However, mixed trading in Asian equities, firm US S&P 500 futures and falling FMCG and metals stocks keep the recovery gains limited ahead of the critical Consumer Price Index (CPI) inflation data from India and the US due later on Tuesday.

At the press time, the Bombay Stock Exchange (BSE) Sensex 30 is up 0.26% on the day at 73,694.76.

Stock market news

The top gainers on Sensex are HDFC Bank, TCS, Reliance Industries, ICICI Bank and Infosys. Meanwhile, the top losers include ITC, JSW Steel, NTPC, Bajaj FinServ and SBI Bank.
Shares of steel-related companies in Asia dropped, following iron ore’s biggest slide since 2022.
British American Tobacco (BAT) is reportedly gearing up for a much-anticipated sale of its stake in ITC within the next fortnight, according to two individuals familiar with the development. ITC shares slide over 2.0%.
China’s state-backed developer Vanke Co. declined after Moody’s Ratings stripped the company’s investment-grade credit rating and warned of potential further cuts.
Wipro expands its partnership with Nutanix to launch new Nutanix-focused business unit.
The US stock markets closed mixed on Monday, as investors resorted to profit-taking amid high valuations and gearing up for the critical US inflation report.
On Friday, the headline NFP rose by 275K in February, compared to market forecasts of 200K while the January figure of 353K was revised down to 229K, a difference of 124K. 
Markets are currently pricing in about a 70% chance that the Fed could begin easing rates in June, a tad lower than a 75% probability seen Monday, according to the CME FedWatch Tool.
The main event risks for markets this week will be the inflation data releases from India and the US.

Nifty 50 FAQs

The Nifty 50, or simply Nifty, is the most commonly followed stock index in India. It was launched in 1996 by the National Stock Exchange of India (NSE). It plots the weighted average share price of 50 of the largest Indian corporations, offering investors comprehensive exposure to 13 sectors of the economy. Each corporation’s weighting is based on its “free-float capitalization”, or the value of all its shares readily available for trading.

The Nifty is a composite so its value is dependent on the performance of the companies that make up the index, as revealed in their quarterly and annual results. Another factor is government policies, such as when in 2016 the government decided to demonetize 500 and 1000 Rupee banknotes. This led to a temporary cash shortage which negatively impacted the Nifty. The level of interest rates set by the Reserve Bank of India is a further factor as it determines the cost of borrowing. Climate change, pandemics and natural disasters are also drivers.

The Nifty 50 was launched on April 22, 1996 at a base level of 1,000. Its highest recorded level to date is 22,097 achieved on January 15, 2024 (this is being written in Feb 2024). The index first closed above the 10,000 level on October 17, 2017. The Nifty recorded its biggest daily decline on March 23, 2020 during the Covid pandemic, when it fell 1,125 points or 12.37%. The Nifty’s biggest gain in a single day occurred on May 18, 2009, when it rose 651 points after the results of the Indian elections.

Major corporations in the Nifty 50 include HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd and Kotak Mahendra Bank.

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