Sensex opens 213 points higher as inflation data boosts rate cut hopes

Benchmark indices opened in positive territory on Wednesday morning, with the Sensex starting at 80,492.17 from its previous close of 80,235.59 and trading at 80,448.25, up 212.66 points or 0.27 per cent, at 9:45 a.m. The Nifty 50 opened at 24,529.95 against its previous close of 24,487.40 and was at 24,579.90, higher by 92.50 points or 0.38 per cent, at the same time, buoyed by India’s retail inflation dropping to an eight-year low in July.

The positive opening came after India’s retail inflation slipped significantly in July, strengthening expectations that the Reserve Bank of India (RBI) may consider rate cuts in future policy meetings. “This cooling inflation not only strengthens purchasing power but also gives the RBI greater flexibility to consider rate cuts in future policy meets, especially at a time when global trade headwinds from US tariff hikes threaten India’s growth momentum,” said Hariprasad K, Founder of Livelong Wealth.

Global factors also supported market sentiment, with US inflation for July remaining steady at 2.7 per cent, below estimates, reinforcing expectations of a September Federal Reserve rate cut. The probability of a Fed rate cut in September has risen to 93 per cent, according to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.

Apollo Hospitals emerged as the top gainer on the Nifty 50, surging 6.19 per cent to ₹7,684.50, followed by Hindalco which jumped 4.44 per cent to ₹696.65. Other notable gainers included Bharat Electronics Limited (BEL) up 1.45 per cent to ₹385.85, Hero MotoCorp gaining 1.39 per cent to ₹4,710.00, and Tata Motors rising 1.32 per cent to ₹662.75.

On the downside, IndusInd Bank led the losers, falling 0.93 per cent to ₹775.75. Maruti Suzuki declined 0.44 per cent to ₹12,784.00, while IT stocks Wipro and Tech Mahindra dropped 0.29 per cent and 0.24 per cent respectively to ₹241.02 and ₹1,505.70. HCL Technologies also slipped 0.22 per cent to ₹1,495.80.

The market’s positive start comes despite continued foreign institutional investor selling, with FIIs offloading equities worth ₹3,398 crore on August 12. However, domestic institutional investors provided support by purchasing equities worth ₹3,507 crore. “In August, so far, FIIs have sold equity for ₹18,620 crores through the exchanges. This FII selling has been completely eclipsed by the massive DII buying of ₹46,272 crores,” noted Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.

Technical analysts remain cautiously optimistic about the market’s near-term prospects. “From a technical angle, Nifty closed Tuesday at 24,485.85, with immediate support seen near 24,340 and resistance around 24,540. Sustaining above the resistance zone could trigger short-covering and extend gains toward higher levels,” Hariprasad K explained.

The banking sector showed mixed performance, with Bank Nifty currently at 55,044 after experiencing volatility in the previous session. “Bank Nifty had a volatile session, attempting an upside move but facing consistent selling from higher levels, ultimately closing down by 467.05 points (0.84%) at 55,043.70,” said Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking.

Currency markets remained relatively stable, with the Indian rupee trading at 87.64 per dollar, showing minimal movement from Monday’s close of 87.65. The Dollar Index traded marginally higher at 98.53, up 0.01 per cent.

Commodity markets reflected the improved sentiment, with gold prices edging higher on softer inflation data. “Gold and silver prices off day’s lows as softer-than-expected CPI data reinforced expectations for a September Fed rate cut, lifting demand for non-yielding assets,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.

Today’s trading session will see key corporate earnings from BPCL, Jubilant Foodworks, IRCTC, Hindustan Copper, United Spirits, and Deepak Nitrite. Market participants will also digest results from ONGC, Apollo Hospitals, and Cochin Shipyard from the previous day.

Looking ahead, investors are keeping a close watch on Friday’s scheduled Trump-Putin talks, which could influence tariff negotiations and broader market sentiment. “However, volatility may persist with FIIs net selling and the market eyeing Friday’s Trump–Putin summit for geopolitical cues,” Tapse added.

Despite the positive opening, analysts advise caution given the recent underperformance of Indian markets. “The significant recent underperformance of the Indian market deserves a close look. Nifty has been setting new lows consecutively for the last six weeks while most other markets are doing well,” Vijayakumar observed.

Technical resistance for Nifty is seen at 24,600, followed by 24,700-24,800, while support lies at 24,400 and 24,300. A breakdown below these support levels may extend the decline toward 24,000, according to technical analysts.

The market’s performance in the coming sessions will largely depend on corporate earnings reactions, global monetary policy cues, and developments in US-China trade relations, with the extended 90-day tariff truce providing some near-term relief to investor sentiment.

Published on August 13, 2025