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By Alina Geogy

MUMBAI – Benchmark equity indices ended higher for the third straight day as market sentiment was buoyed by the latest US CPI inflation data, which hinted at the likelihood of rate cuts by the US Federal Reserve this year. Further, a rise in banking stocks supported the rise in indices.

The indices had opened on a positive note, tracking gains in the US market on Wednesday, after core inflation data in the US came in slightly softer than expected. Thereafter, these indices held on to the opening gains and were range-bound for the rest of the session. The Nifty 50 moved within a range of hardly 120 points throughout the session and closed 0.4% higher at 23311.80 points on Thursday. The BSE Sensex moved in a similar fashion and closed 0.4% higher at 77042.82 points. 

The softer-than-expected CPI inflation data has led to some optimism that the US Federal Reserve could likely have a less aggressive stance and cut key rates more than recently projected. The inflation data also led to a fall in yields on Treasury bills in the US.

Banking stocks were the top contributors to the rise of the indices. The Nifty Bank index ended over 1% higher, with all 12 constituents closing with gains. Axis Bank, HDFC Bank, and State Bank of India ended 0.6-1.1% higher. Banks are expected to report strong on-year growth in their earnings for the December quarter. Analysts are bullish about the moderation in credit growth of several banks and strong growth in their term deposits during the quarter.

Grabbing the spotlight, shares of HDFC Life Insurance Co. rose sharply after the insurer's earnings for the December quarter surprised positively. The company reported a higher-than-expected margin for the quarter on a sequential basis along with 14% on-year growth in net profit. Brokerage firms shared a positive outlook for the company, citing margin expansion despite new regulations for surrender value, robust demand in tier-II and tier-III markets, and newer products.

Following the earnings announcement, HDFC Life's stock rose nearly 12% to hit a one-month high and finally closed 8% higher at INR 641.40. Trade volume also surged, with over 24 million shares changing hands on the NSE, marking its highest volume since Jun. 13. Brokerage Nomura Global Markets Research upgraded the stock to 'buy' from 'neutral' though the target price was kept steady at INR 735.

Shares of Adani group companies rose sharply, with those of Nifty 50 constituents Adani Enterprises and Adani Ports and Special Economic Zone rising as much as 7% and 5%, respectively, in early trade. However, most closed off their intraday highs. As per market buzz, these stocks rose after US-based short seller Hindenburg Research's founder, Nathan Anderson, announced that the firm would disband. The research firm has, in detailed reports since 2023, accused the Adani group companies of stock manipulation and financial misconduct. These allegations had led to heavy selling in these stocks in early 2023, though most have gradually recovered these losses. Shares of Adani Green Energy and Adani Power, which closed up 3.4% and 2.5%, respectively, were among the top gainers among the group companies.

Brent crude oil futures traded on the Intercontinental Exchange rose over $82 per barrel for the second day in a row. Prices reached the highest levels since mid-August after the US imposed sanctions on Russian oil producers. Shares of oil marketing companies Bharat Petroleum Corp. and Hindustan Petroleum Corp. ended lower for the second consecutive day. Meanwhile, shares of oil producer Oil and Natural Gas Corp. ended nearly 2% higher.

Shares of Rail Vikas Nigam closed up 10.6% after the company on Wednesday said it had received a letter of acceptance for an INR 36.22-billion order from Bharat Sanchar Nigam. The company Thursday said it received another letter of acceptance for orders worth INR 96.13 billion from Bharat Sanchar Nigam. Both orders are related to the development of a middle-mile network of BSNL's BharatNet Project.

With the earnings season in full swing, investors reacted to the quarterly earnings of several companies as they gauged the hits and misses. Shares of CEAT recorded their steepest single-day decline since 2020 after the tyre manufacturer's net profit for the December quarter fell more than the Street estimated. The stock had fallen as much as 7.6% to its lowest level in nearly two months earlier in the day, but recovered most losses at close.

On the other hand, shares of L&T Technology Services closed up over 8% ahead of its earning announcement. After market hours, the company announced its earnings for the December quarter, which nearly met expectations. The company's revenue for 2024-25 (Apr-Mar) is expected to grow 10% in constant currency terms, Mirae Asset Sharekhan cited its management as saying in a post-earnings analyst call.

Shares of several railway-linked companies surged and were among the top gainers in the Nifty 500 index. Shares of IRCON International, Jupiter Wagons, RailTel Corp. of India ended up 9-16%. Elara Securities, in a report Wednesday, said it had a positive outlook for the railway sector due to factors such as modernisation, upgradation, and exports. The brokerage expects a pick-up in order inflow in the March quarter.

* Of the Nifty 50 stocks, 32 rose and 18 fell

* Of the Sensex stocks, 21 rose and 9 fell

* On the NSE, 2,083 stocks rose, 699 fell, and 74 were unchanged

* On the BSE, 2,778 stocks rose, 1,188 fell, and 101 were unchanged

* Nifty PSU Bank: up 2.6%; Nifty Metal: up 1.7%; Nifty FMCG: down 0.6%

BSE                                               NSE

Sensex: 77042.82, up 318.74 points or 0.4%        Nifty 50: 23311.80, up 98.60 points or 0.4%

End

Edited by Tanima Banerjee

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