Indian equity benchmarks rose sharply on Friday, tracking the biggest rally in Wall Street stocks since 2020 after data showed US inflation eased to the lowest since January and renewed hopes the Federal Reserve moves away from its aggressive rate hike stance.
After falling for two straight days, the 30-share BSE Sensex index rose 1051.64, or 1.73 per cent, to 61,665.34, and the broader NSE Nifty-50 index opened in the green, reflecting a feverish risk-on rally in other Asian bourses.
The Nifty IT index surged 3.2 per cent, and the Nifty bank index rose 1.3 per cent.
Zomato's shares jumped 10 per cent after the Indian food delivery firm reported a lower loss for the second quarter on Thursday.
A smaller-than-expected rise in US consumer prices fueled optimism that the Fed will slow its aggressive pace of interest rate hikes, pushing Asian markets to surge higher on Friday, while the dollar suffered significant losses.
"It's something the market had been waiting for a long time," Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital, told Reuters. "There was a lot of money sitting on the sidelines."
Overnight, the S&P 500 and Nasdaq notched up their biggest daily percentage gains in over 2-1/2 years on the inflation data.
According to Rodrigo Catril, Senior Currency Strategist at National Australia Bank in Sydney, the case is now strengthening for the Fed to moderate its aggressive stance after four consecutive 75 basis-point interest rate hikes to control decades-high inflation.
Hong Kong shares soared 6.5 per cent in early trade while mainland China stocks opened 2.1 per cent higher.
Chinese stocks have had a rocky few weeks, falling on COVID-19 outbreaks, the accompanying lockdowns, and weak economic data, but also periodically jumping on expectations of an eventual economic reopening.
But investors' optimism could be short-lived given the volatility in cryptocurrencies this past week.
According to the most recent developments for FTX, the cryptocurrency exchange was frantically trying to raise approximately $9.4 billion from investors and competitors after being battered by a wave of customer withdrawals, a source told Reuters.
Bitcoin recovered some of its weekly losses and was last trading around $17,900. It reached its all-time high of $69,000 one year ago today.
So, happy anniversary, indeed.
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