Sensex, Nifty To Follow Global Peers Higher After US Inflation Data

(RTTNews) - Indian shares may follow global peers higher on Thursday amid signs that U.S. inflation is cooling, albeit slowly.

That said, volatility cannot be ruled out due to lingering concerns over the Lok Sabha 2024 election outcome.

Meanwhile, India's merchandise trade deficit widened to a four-month high of $19.1 billion in April amid weak global demand in the western countries and a sharp surge in gold imports, official data showed.

Oil & stocks could be in focus today after the government cut the windfall tax on crude petroleum to Rs 5700 per ton from Rs 8400 per ton with effective from May 16.

Benchmark indexes Sensex and Nifty ended marginally lower on Wednesday after trading in a tight range throughout the session.

Asian markets traded sharply higher, with benchmark indexes in Australia and New Zealand leading regional gains as government bonds rallied.

The dollar traded weak, helping gold prices push higher close to $2,400 per ounce.

Oil prices rose after data showed a bigger-than-expected draw in commercial crude stockpiles.

U.S. stocks rose sharply overnight, with all three major averages notching record closing highs, as April retail sales unexpectedly came in flat, consumer prices rose less than expected and the core CPI slowed - boosting hopes for interest rate cuts by the Federal Reserve in the near future.

Treasury yields dipped as data showed consumer prices increased by 0.3 percent in April after rising by 0.4 percent in March. Economists had expected consumer prices to climb by another 0.4 percent. On an annual basis, the CPI slowed to 3.4 percent 3.5 percent, matching expectations.

Core inflation decelerated from 3.8 percent to 3.6 percent, marking the lowest reading ex-food and energy since April 2021.

The S&P 500 climbed 1.2 percent to break above 5,300 for the first time and the Dow rose 0.9 percent closer to the 40,000 milestone while the tech-heavy Nasdaq Composite surged 1.4 percent.

European stocks closed broadly higher on Wednesday as investors cheered the cooler-than-expected U.S. inflation print as well as encouraging Eurozone industrial production and GDP figures.

The pan European STOXX 600 gained 0.6 percent. The German DAX climbed 0.8 percent, while France's CAC 40 and the U.K.'s FTSE 100 both edged up 0.2 percent.