Market Sentiment Lifts Amid Rate Cut Hopes and Cooling US Inflation
Mumbai, May 14 — Indian equity benchmarks staged a strong rebound in early trade on Wednesday, buoyed by encouraging inflation data from both India and the United States. Retail inflation in India eased to a nearly six-year low of 3.16 percent in April, raising expectations of a potential rate cut by the Reserve Bank of India (RBI) in its upcoming June policy review.The BSE Sensex surged 281.43 points to 81,429.65, while the NSE Nifty advanced 96.65 points to 24,675 in early trade.
Bharti Airtel, Tata Steel Among Top Gainers
Leading the rally were stocks like Tata Steel, Bharti Airtel, Tech Mahindra, Infosys, Mahindra & Mahindra, Bajaj Finserv, and Reliance Industries.Bharti Airtel shares climbed over 2 percent after the telecom major posted a five-fold jump in consolidated net profit to Rs 11,022 crore for the March 2025 quarter, driven by tariff hikes and a one-time tax gain.
On the other hand, Tata Motors, Asian Paints, Nestle, and IndusInd Bank were among the top losers. Tata Motors fell over 1 percent following its disappointing Q4 earnings, which revealed a 51 percent drop in consolidated net profit to Rs 8,556 crore, impacted by lower volumes and operating leverage.
Inflation Data Fuels Optimism
The Consumer Price Index (CPI)-based inflation eased from 3.34 percent in March and 4.83 percent in April 2024to 3.16 percent in April 2025, the lowest since July 2019, when it was at 3.15 percent. The decline was attributed to subdued prices of vegetables, fruits, pulses, and other protein-rich food items.“This leaves enough room for the Monetary Policy Committee (MPC) to cut rates thrice more in this cycle,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, adding that this is particularly positive for rate-sensitive sectors.
Global Cues and Other Factors
According to Vikas Jain, Head of Research at Reliance Securities, cooling US inflation data, easing US-China trade tensions, and reduced geopolitical frictions between India and Pakistan added to the positive sentiment.Asian markets reflected mixed trends. While South Korea’s Kospi, Shanghai’s SSE Composite, and Hong Kong’s Hang Seng traded higher, Japan’s Nikkei 225 was marginally lower. US markets closed mostly higher on Tuesday.
Meanwhile, Brent crude dipped 0.57 percent to USD 66.25 per barrel, further supporting investor optimism.
Despite the uptrend, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 476.86 crore on Tuesday, according to exchange data.
On the previous trading day, the markets had witnessed sharp declines, with the Sensex plunging 1,281.68 points and the Nifty dropping 346.35 points, making today's recovery a much-needed bounce for investors.
