Stock markets rebound in early trade; Sensex jumps 553 points

New Delhi: Market benchmark indices Sensex and Nifty rebounded in early trade on Wednesday after a sharp decline in the previous session led by bank stocks and a softer-than-expected US inflation data reinforcing expectations that the Federal Reserve may adopt a less aggressive monetary policy stance in the coming months.

The 30-share BSE Sensex jumped 553 points to 77,603.57 in early trade. The 50-share NSE Nifty went up by 148.15 points to 24,198.40.

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From the Sensex pack, Bajaj Finance, Axis Bank, Eternal, InterGlobe Aviation, UltraTech Cement and State Bank of India were the major winners.

Infosys, Tata Consultancy Services, Power Grid and Tech Mahindra were among the laggards.

In Asian markets, South Korea's Kospi jumped 7.66 percent . Japan's Nikkei 225 index and Hong Kong's Hang Seng index traded higher, while Shanghai's SSE Composite index quoted lower.

US markets ended higher on Tuesday.

"Global cues turned relatively supportive overnight. US equities ended higher, with the S&P 500 gaining 0.38 percent and the Nasdaq advancing 0.90 percent, after softer-than-expected June CPI data reinforced hopes of a more accommodative Federal Reserve policy," Rajesh Palviya, Head of Research, Axis Direct, said.

Brent crude eased towards USD 85 per barrel after US President Donald Trump withdrew the proposed 20 percent transit fee through the Strait of Hormuz, he added.

Brent crude, the global oil benchmark, quoted 1 percent higher at USD 85.63 per barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 739.69 crore on Tuesday, according to exchange data.

"Providing some support to global sentiment, US consumer price inflation eased to 3.5 percent in June, below market expectations of 3.8 percent, indicating that underlying price pressures may be moderating.

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"The softer-than-expected inflation reading has reinforced expectations that the Federal Reserve could adopt a less aggressive monetary policy stance in the coming months, offering some relief to global risk assets despite the heightened geopolitical uncertainty," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.

On Tuesday, the Sensex tanked 561.46 points, or 0.72 percent, to settle at 77,054.94. The Nifty dropped 158.95 points, or 0.66 percent, to end at 24,052.05.

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