Indian stock markets opened on a positive note Thursday, riding the wave of a global market rally triggered by easing inflation in the United States.

The benchmark Nifty 50 index surged 0.57% or 141.20 points to 25,059.65, while the BSE Sensex climbed 0.5% or 407 points to 81,930.18 at the opening bell.

This upbeat start comes in response to the latest US inflation data, which showed a moderation in August. The cooling inflation has fueled expectations of potential Federal Reserve rate cuts at its upcoming September 18 meeting.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The August US CPI inflation of 0.2% has brought down the 12-month inflation to 2.5% from 2.9% earlier. This paves the way for a Fed rate cut in September, though likely a cautious 25 basis point reduction given the still-high core inflation at 3.2%.”

Vijayakumar also noted that Indian CPI inflation is expected to be around 3.5% in August, potentially setting the stage for a rate cut by the Monetary Policy Committee in 2024.

On the National Stock Exchange, all broad market indices opened in the green. Sectoral indices saw Nifty Metal and Nifty PSU Bank leading the pack with gains of 1.29% and 0.23% respectively.

However, Tata Motors shares faced some pressure, declining by about 0.5%. In other market news, the Bajaj Housing Finance IPO attracted a record Rs 3.23 lakh crore in application money from 89 lakh investors.

The positive sentiment was mirrored across Asian markets. Japan’s Nikkei 225 surged 2.7%, while Taiwan’s Weighted index jumped over 3%. South Korea’s KOSPI and Hong Kong’s Hang Seng also posted gains.

This follows Wednesday’s rally in US markets, where the S&P 500 and Nasdaq indices rose more than 1% and 2.17% respectively after the inflation report showed annual inflation dropping to 2.5% in August.

(Inputs from ANI)