Mumbai: India’s benchmark equity indices advanced on Wednesday, recouping earlier losses led by financials, automobiles, energy and property stocks. Markets dodged the weakness in Asian and European shares, but gains were muted as investors looked forward to the US inflation reading.

The Sensex came very close to surpassing the 62,000-mark. The gauge ended at 61,940.20, up 178.87 points, or 0.29%, from Tuesday’s close. The Nifty advanced 49.15 points, or 0.27%, to close at 18,315.10.

US April consumer inflation, which was announced on Wednesday after trading hours in Mumbai, increased 4.9% – the lowest since April 2021. This was in line with expectations, raising expectations of a pause in interest rate increases by the Fed.

D-Street Indices Shrug Off Weakness in Asia, Europe

“We believe that the Fed would breathe a sigh of relief, especially after a change in policy tone at the last meeting which underlined the importance of economic data in policy decisions going forward,”said Manish Chowdhury, research head, Stoxbox. “We would now keep a tab on the labour market data going forward which would provide further hints on whether a rate pause is on the cards at the June FOMC meeting.”

On Wednesday, foreign portfolio investors (FPIs) featured net buyers for the 10th straight session.

“The Nifty experienced a period of volatility though the overall trend remains positive, indicating there is an overall upward bias in the market,” said Rupak De, senior technical analyst, LKP Securities.

The Nifty can test 18,400-18,500 levels as long as it sustains above 18,200, De said. “Surpassing these levels could take indices to new highs.” Benchmark indices have gained 1.5% since the start of May.

The market breadth was strong. About 1,050 stocks advanced on the NSE against 865 stocks that ended in the red. However, broader markets saw muted activity and were little changed. The NSE Mid- and Small-cap indices ended up 0.1% and 0.5%, respectively.

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