BENGALURU (Reuters) -Indian shares hit record highs at the open on Thursday, led by information technology stocks amid broader cheer after a market-pleasing U.S. inflation report boosted expectations of a Federal Reserve rate cut.
The NSE Nifty 50 was up 0.48% at 23,436.95, while the S&P BSE Sensex rose 0.49% to 76,978.65, as of 9:28 a.m. IST. Both the indexes advanced about 0.7% each to hit record high levels at the open.
IT firms, which gain a chunk of their revenue from the U.S., jumped 1.1%.
U.S. consumer prices were unexpectedly unchanged in May, while core prices grew at their slowest annual pace in over three years, bolstering bets of a rate cut in September to 56.7% from 46.8% on Tuesday, according to the CMEGroup’s FedWatch tool.
That was in contrast to comments from Fed Chair Jerome Powell, who, while acknowledging easing inflation, said inflation was still too high and that rate cut expectations have been pushed out. The central bank held rates steady, as expected.
Domestic-rate sensitive financials also climbed 0.6%, with HDFC Life Insurance rising about 3%.
The Nifty 50 has hit all-time highs thrice in four sessions this week as the national election results ensured policy continuity and the domestic central bank raised its economic growth forecast.
Meanwhile, data also showed India’s retail inflation eased slightly in May, helped by a drop in fuel prices, although food inflation rose year-on-year. Economists expect the central bank to hold rates until the October-December quarter.
(Reporting by Kashish Tandon and Bharath Rajeswaran in Bengaluru; Editing by Savio D’Souza and Sonia Cheema)
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