Indian stock indices kicked off Wednesday’s trading session on a positive note, with the Sensex and Nifty both up 0.3% and hovering just below their all-time highs. The bullish trend comes ahead of the highly anticipated release of India’s May inflation data, as investors brace for potential market-moving revelations.

After a largely stable Tuesday, the Indian equity markets continued their recent bull run, with most sectoral indices trading in the green. This upbeat sentiment follows Monday’s session, where both the Sensex and Nifty 50 touched record highs of 77,079 and 23,411 points, respectively, before closing with a marginal dip.

Analysts attribute the declining volatility in the Indian market to the recent 32% drop in the India VIX over the past five days, signaling a shift from heightened volatility to a consolidation phase. As the focus turns to fundamentals and news flows, market participants eagerly await the release of the US inflation data and the Federal Reserve’s policy decision, which could influence global equity market trajectories.

India’s April retail inflation eased to 4.83% from 4.85% in March, though consumer food price inflation surged to 8.70% from 8.52%. While the retail inflation figure remains within the Reserve Bank of India’s (RBI) 2-6% comfort level, it exceeds the ideal 4% scenario, prompting scrutiny from market observers.

Newly appointed Finance Minister Nirmala Sitharaman’s policy decisions are also on the radar, as she prepares to present the full Budget for 2024-25. Her fresh initiatives will be widely tracked, particularly in the aftermath of the recent general elections, where the incumbent BJP-led National Democratic Alliance (NDA) secured a comfortable majority.

“US Fed commentary could provide direction to the market. So far, investors are baking in one rate cut towards the end of the year; so any deviation from that could drive the market on either side,” said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.

(Inputs from ANI)