Indian equity benchmarks rose on Wednesday to extend their rally for the fourth straight day, even as world stocks started to reverse their recent surge and fall as investor sentiment was caught between positive earnings reports and fears that further indications of continued, robust inflation will keep major central banks firmly in aggressive rate-hike mode.
The BSE Sensex index rose146.59 points to end at 59,107.19, and the broader NSE Nifty advanced 25.30 points to 17,512.25, marking a rise in both those benchmark indexes for the fourth day in a row.
Nestle, HDFC, Axis Bank, Reliance Industries, ITC, HDFC Bank, and UltraTech Cement were the major winners of the Sensex pack.
The laggards included NTPC, State Bank of India, Bajaj Finserv, HCL Technologies, Dr Reddy’s, Infosys, and Maruti.
The reversal in risk sentiment came after data revealed that higher food costs had sent British inflation back to a 40-year high of 10.1 per cent, adding pressure on the Bank of England to adopt an even more aggressive rate hike path.
Neel Kashkari, President of the Minneapolis Federal Reserve Bank, indicated late on Tuesday that the Fed may need to raise its benchmark interest rate above 4.75 per cent if underlying inflation continues to rise.
Still, Wall Street equities were expected to open higher as concerns about a dismal earnings season caused by rising borrowing prices and soaring inflation have been allayed by positive reports this week from companies including Goldman Sachs, Bank of America, and Johnson & Johnson.
The S&P 500 stock index has increased by more than 6 per cent since last week’s almost two-year lows.
But the STOXX 600 index for all of Europe fell 0.3 per cent.
“What is reassuring is that in an environment which has been very difficult for equity markets over the past few weeks, is that you have (earnings) numbers that are turning out positive,” Francois Savary, Chief Investment Officer at Prime Partners, told Reuters.
“Is it going to last? We need to focus on the guidance, and also, we are still living with this interest rate environment that is very volatile, and that means it’s difficult to see the market pushing higher.”