Domestic stock benchmarks rose sharply on Friday, following a surge in Asian stock markets after Wall Street stocks made a remarkable comeback overnight, closing significantly higher after a deep sell-off earlier in an extremely volatile session.
The BSE Sensex index rose 1,087.14 points in early trading to 58,322.47 and the broader NSE Nifty climbed 317.3 points to 17,331.65.
All Sensex stocks were up, with Infosys trading more than 4 percent higher, followed by HCL Technologies, Tech Mahindra, ICICI Bank, HDFC Bank, Larsen & Toubro, State Bank of India, Kotak Mahindra Bank and HDFC Ltd.
The second largest IT services provider in India, Infosys, reported a better-than-expected 11 percent increase in consolidated net profit for the September quarter at Rs 6,021 crore and a Rs 9,300 crore share repurchase program on Thursday.
Early Asian trading saw a roughly 1.5 percent rise in MSCI’s broadest index of Asia-Pacific stocks outside of Japan. South Korea was up 2 percent, the Australian commodity-heavy stock index was up more than 1.6 percent and Japan’s Nikkei was up more than 2.5 percent.
China’s blue-chip index opened nearly 1 percent higher as the governor of China’s central bank pledged to increase support for the real economy as the COVID lockdowns expanded ahead of the pivotal Communist Party Congress.
Investors had sold stocks earlier this week in anticipation of high inflation in the US; thanks to Friday’s recovery, the Asian index has reduced its weekly losses to just under 3.5 percent.
On Thursday, U.S. core inflation excluding food and fuel prices surpassed expectations to reach 6.6 percent, the largest annual increase in 40 years, mainly driven by significant price increases in the services sector.
But declining risk appetite was already evident, with US futures pointing to a lower open.
“There are no convincing ways to explain overnight stock price movements in the US given higher-than-expected September inflation figures,” said Robert Carnell, Regional Head of Research for Asia-Pacific at ING.
“So on almost every stat, these numbers are shouting that the Fed will raise interest rates faster, bring them higher, and leave them there longer than the market expected. And that raises the prospects for a recession, even a bad recession. he added. .