Indian Markets Open Higher: Nifty Up 0.37%, Sensex Gains 0.33% Amid Softer U.S. Inflation Data

Market Update at 9:45 AM: Indian shares opened higher on Friday, tracking gains across Asian markets after a softer U.S. inflation reading strengthened expectations of further monetary easing by the U.S. Federal Reserve in 2026.

At 9:15 a.m. IST, the Nifty 50 rose 0.37 per cent to 25,911.50, while the BSE Sensex gained 0.33 per cent to 84,756.79. Thirteen of the 16 major sectoral indices opened in positive territory, reflecting broad market strength.

The broader market also moved higher, with the Nifty Midcap index edging up 0.2 per cent and the Nifty Smallcap index gaining 0.3 per cent. Asian equities climbed 0.6 per cent after U.S. consumer price data pointed to easing inflation pressures.

U.S. consumer prices rose 2.7 per cent year-on-year in November, compared to forecasts of a 3.1 per cent increase, supporting views that the Federal Reserve may cut rates next year. Meanwhile, the Bank of Japan raised interest rates to levels not seen in 30 years, broadly in line with expectations.

Pre-Market Update at 7:40 AM: The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open higher on Friday, 19 December, following four sessions of losses. The upside indication comes on the back of positive global cues after cooling US inflation revived optimism around interest-rate cuts and boosted overall equity sentiment. The GIFT Nifty was trading near the 26,946 mark, showing a premium of about 39 points.

Asian markets opened firm tracking gains in US equities, where cooling inflation data supported the case for more Federal Reserve rate cuts and eased tech-sector jitters. This positive momentum helped lift broader risk appetite across global equity markets.

On the institutional front, flows remained supportive. On Thursday, 18 December, Foreign Institutional Investors (FIIs) were net buyers for the second straight session, purchasing equities worth Rs 595.78 crore. Domestic Institutional Investors (DIIs) also continued their buying streak, investing Rs 2,700.36 crore and marking 40 consecutive sessions of net inflows.

Indian equities ended with mild losses on Thursday as heavyweight stocks such as HDFC Bank and Sun Pharma dragged the market lower. The Nifty 50 briefly crossed 25,900 before slipping to close nearly flat at 25,815.55. The Sensex fell 77.84 points to end at 84,481.81, extending declines for the fourth straight day. Market caution ahead of the Bank of Japan’s policy decision contributed to profit-booking at higher levels. Sectorally, Nifty IT led gains with a 1.21 per cent rise, while Nifty Media was the top loser. Broader markets outperformed, with Nifty Midcap 100 and Nifty Smallcap 100 closing in the green.

Wall Street ended higher on Thursday as the S&P 500 snapped a four-day losing streak. Softer US inflation data and upbeat guidance from Micron Technology lifted investor confidence. The S&P 500 gained 0.79 per cent to close at 6,774.76, while the Nasdaq Composite advanced 1.38 per cent to 23,006.36. The Dow Jones Industrial Average added 65.88 points, or 0.14 per cent, to settle at 47,951.85.

US consumer prices eased more than expected in November, boosting hopes of faster disinflation and supporting expectations of further monetary easing. CPI rose 2.7 per cent annually versus the 3.1 per cent forecast, while core CPI climbed 2.6 per cent against expectations of 3 per cent. Food and energy prices increased 2.6 per cent and 4.2 per cent respectively, while shelter costs rose 3 per cent. The data, delayed due to a government shutdown that also canceled the October reading, was viewed by investors as supportive of future Fed rate cuts after three reductions this year.

In the UK, the Bank of England cut its benchmark interest rate by 25 bps to 3.75 per cent, marking its first reduction since August. The move followed faster-than-expected easing in inflation and concerns over economic softness. The five-to-four vote reflected a cautious approach, even though markets had largely priced in the decision.

The European Central Bank maintained a steady stance, keeping rates unchanged for a fourth consecutive meeting as euro-area inflation remains near target. Policymakers reiterated a data-dependent approach, noting projections that suggest inflation could return to the 2 per cent goal by 2028.

In Japan, core inflation held steady at 3 per cent for the second month, signalling persistent price pressures ahead of the Bank of Japan’s widely expected rate hike to 0.75 per cent — a level not seen in nearly three decades. Headline inflation eased slightly to 2.9 per cent.

The bond market showed a mixed response to the softer US CPI print. US 10-year Treasury yields held near 4.126 per cent, staying below recent highs. Japan’s 10-year yield stayed at 1.98 per cent, its highest in 18 years. UK gilts weakened as the Bank of England’s remarks dampened expectations for an early follow-up rate cut. Currency movements were muted, with sterling at USD 1.3378 and the euro at USD 1.1725. The US dollar was little changed against the yen at 155.60.

Gold prices continued to hover close to record highs, supported by cooling inflation and expectations of additional rate cuts. Spot gold traded around USD 4,335 an ounce, up nearly 1 per cent for the week. Silver edged higher, while platinum and palladium also strengthened near multi-year highs.

Crude oil remained under pressure, with prices on track for a second straight weekly decline amid oversupply worries. WTI traded near USD 56 per barrel, and Brent slipped below USD 60, with both benchmarks down over 2 per cent for the week. Despite geopolitical tensions, prices remain about 20 per cent lower for the year due to higher production and subdued demand.

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Disclaimer: The article is for informational purposes only and not investment advice.