Indian equities rebounded on Wednesday, buoyed by a significant decline in retail inflation to a near six-year low of 3.16% in April—boosting investor sentiment and heightening expectations for a possible interest rate cut by the Reserve Bank of India in its upcoming June policy review. The Sensex gained 182 points, while the Nifty advanced nearly 89 points amid easing global inflationary pressures and stabilizing geopolitical tensions. Market gains were further supported by strong corporate earnings, including Bharti Airtel’s fivefold jump in net profit, even as select stocks such as Tata Motors underperformed due to weak quarterly results.
Market Overview: A Positive Rebound
In a session marked by volatility, India’s benchmark equity indices recovered from Tuesday’s sharp losses. The BSE Sensex rose 182.34 points, or 0.22%, to close at 81,330.56, having oscillated between an intraday high of 81,691.87 and a low of 80,910.03. Meanwhile, the NSE Nifty added 88.55 points, or 0.36%, to settle at 24,666.90.
This recovery came on the heels of Tuesday’s steep selloff, where the Sensex plunged over 1,280 points and the Nifty lost 346 points. Analysts attributed the rebound to renewed investor optimism stemming from favorable inflation data and stabilizing global cues.
Inflation Data Strengthens Case for Rate Cut
India’s retail inflation, measured by the Consumer Price Index (CPI), eased to 3.16% in April—its lowest level since July 2019, when it stood at 3.15%. This marks a significant drop from 3.34% in March and 4.83% in April 2024. The cooling of prices across vegetables, fruits, pulses, and protein-rich items contributed to the softening inflationary environment.
In tandem, the Wholesale Price Index (WPI) also fell to a 13-month low of 0.85%, reflecting broad-based moderation in food, fuel, and manufactured goods prices. These data points have increased the likelihood that the Reserve Bank of India may pursue a policy rate cut in its forthcoming monetary policy meeting, particularly to support growth amid easing price pressures.
Corporate Results: Airtel Surges, Tata Motors Stumbles
Among notable gainers on the Sensex were technology and telecom stocks. Bharti Airtel climbed nearly 1% following a strong Q4 performance, reporting a consolidated net profit of Rs. 11,022 crore—a fivefold increase—driven by tariff hikes and a one-time tax benefit.
Tech majors like Tata Consultancy Services, Infosys, Tech Mahindra, and HCL Technologies also supported the market’s upward movement. Automakers such as Maruti Suzuki and Mahindra & Mahindra gained as well, with investor optimism partially rooted in stable domestic consumption trends.
However, Tata Motors slipped over 1% after reporting a sharp 51% decline in consolidated net profit to Rs. 8,556 crore for the March quarter. The decline was attributed to weaker volumes and a loss in operating leverage.
Global and Sectoral Cues
Asian markets reflected mixed sentiment. While South Korea’s Kospi, Shanghai’s Composite Index, and Hong Kong’s Hang Seng closed higher, Japan’s Nikkei ended in the red. European bourses traded mostly lower, while U.S. indices ended Tuesday largely on a positive note.
Crude oil prices provided an additional tailwind for Indian equities, as Brent crude fell 1.13% to USD 65.88 per barrel, easing cost pressures for import-dependent sectors.
However, Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth Rs. 476.86 crore on Tuesday, suggesting that global risk sentiment remains cautious despite domestic gains.
Outlook: Eyes on RBI and Global Developments
With inflation retreating and macroeconomic fundamentals appearing relatively stable, markets are increasingly pricing in a dovish tilt from the RBI in June. Analysts caution, however, that global uncertainty, including capital flows and oil market dynamics, could still pose headwinds.
For now, investors appear encouraged by a combination of supportive domestic data, a strong corporate earnings season, and easing international pressures—offering a potentially fertile backdrop for continued market momentum in the weeks ahead.
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