US wholesale prices increased at a faster pace in April, according to fresh government data. The rise, driven by a sharp increase in the cost of services, suggests that inflation continues to be a concern. This presents a challenge for the US Federal Reserve as it tries to keep inflation in check.
India’s stock benchmarks jumped over 1% on Monday, led by gains in bank shares after ICICI Bank’s better-than-expected fourth-quarter results. The market may be on course to scale records though the spike in the Volatility Index or VIX, a fear gauge, shows that traders see risks to equities at current levels. The outcome of the US Federal Reserve’s rate-setting meeting on Wednesday is expected to determine the direction of equities in the foreseeable future.
Indian shares rose on Monday as gains in the second-largest private lender ICICI Bank on better-than-expected quarterly profit spurred a rise in heavyweight financials. NSE Nifty 50 rose 1% at 22,643, while the S&P BSE Sensex added 1.28% to 74,671. Analysts expect the market to continue its upward trend with key indicators showing positive signals. US and European markets also showed positive momentum.
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US Federal Reserve Chairman Jerome Powell signals likelihood of rate cuts in June, leading to a global rally in stocks and gold prices hitting a lifetime high. The dovish commentary reflects confidence in the US economy. Analysts remain cautious, taking into account factors such as inflation trends, transient versus permanent effects of the pandemic, and structural shifts in the economy. Personal consumption expenditure figures for February will provide further insights into the Fed’s intentions.
Stocks were headed for their biggest weekly rise in a year on Friday, while bonds rallied and the dollar was on the back foot as investors cheered a pause in U.S. interest rate hikes. U.S. jobs data due later in the day is the next major focus.
