Indian stock markets soared on Wednesday, with the benchmark indices Sensex and Nifty50 making strong gains, driven by a surge in IT and financial stocks. Both indices rose sharply after U.S. and domestic inflation data for April came in lower than expected, easing concerns about further interest rate hikes. By 9:25 AM, the BSE Sensex had gained 467 points, or 0.58%, reaching 81,616, while the Nifty50 had risen 137 points, or 0.56%, to trade at 24,715. The market rally was supported by positive economic data and sectoral advances, particularly in financial services, IT, and metal stocks.
U.S. consumer inflation rose by 0.2% in April, which was lower than the anticipated 0.3% increase, providing relief to markets concerned about future Federal Reserve rate hikes. Similarly, India’s retail inflation eased to 3.16% in April, the lowest in six years, surpassing expectations. This drop in inflation raised hopes of potential rate cuts by the Reserve Bank of India, further boosting market confidence.
Among the Sensex constituents, Tata Steel, Bharti Airtel, L&T, Infosys, Tech Mahindra, and Bajaj Finserv were the top gainers, with share prices rising between 1% and 4%. Notably, Tata Steel’s shares surged by 4% following the announcement of its Rs 15,000 crore capital expenditure plan for FY26. Shares of Garden Reach Shipbuilders & Engineers (GRSE) also spiked by 14.4% in early trade, after the company reported a significant 118% year-on-year increase in its Q4FY25 net profit to Rs 224 crore.
On the sectoral front, all major indices opened higher. The Nifty Financial Services, IT, Metal, PSU Bank, Realty, and Oil & Gas indices rose between 0.5% and 2%. This broad-based rally contributed to a substantial increase in market capitalization, which rose by Rs 3.1 lakh crore to reach Rs 434.2 lakh crore.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted that global markets are currently in a state of flux. However, he noted that the recent deal between the U.S. and China over trade tariffs has eased some market pressures. He also pointed to the weakening dollar and rising U.S. Treasury yields, which may impact foreign institutional investor (FII) flows into India. Despite global uncertainties, Dr. Vijayakumar was optimistic about India’s prospects. He emphasized that the sharp dip in India’s CPI inflation to 3.16% leaves room for further rate cuts by the Reserve Bank of India, which could provide positive momentum to the market, particularly for rate-sensitive sectors.
Hardik Matalia, a Derivative Analyst at Choice Broking, also shared his technical outlook for the Nifty50. According to Matalia, Nifty could find support at 24,500, 24,400, and 24,300, with 24,700 and 24,800 acting as immediate resistance levels.
Asian stocks were also higher on Wednesday, buoyed by positive U.S. inflation data that increased expectations of rate cuts by the Federal Reserve. MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.9% in early trade, while Japan’s Nikkei 225 index trimmed earlier gains, falling by 0.7%. Meanwhile, U.S. stocks had managed to climb back into positive territory for the year, recovering from losses triggered by President Donald Trump’s tariffs. European and U.S. equity futures pointed to potential declines, indicating cautious investor sentiment ahead of upcoming trade and economic developments.
In terms of investor flows, Foreign Institutional Investors (FIIs) sold equities worth Rs 476 crore on May 13, while Domestic Institutional Investors (DIIs) continued their buying streak, purchasing Rs 4,273 crore in equities on the same day. This divergence between FII and DII activity reflects the differing outlooks on the Indian market amid global uncertainties.
Oil prices held steady near two-week highs in early trading on Wednesday. The agreement between the U.S. and China to temporarily lower their reciprocal tariffs, along with a weakening U.S. dollar, supported oil prices. Brent crude futures fell by 10 cents, or 0.15%, to $66.53 per barrel, while U.S. West Texas Intermediate (WTI) crude dipped by 7 cents, or 0.11%, to $63.60 per barrel. The Indian rupee strengthened against the U.S. dollar, rising by 31 paise to 85.05 in early trade. Meanwhile, the dollar index, which tracks the greenback against a basket of six major currencies, declined by 0.12%, settling at 100.88.
