While Wall Street takes a breather for Presidents’ Day, the Indian equity markets are providing plenty of fireworks. After a nervous start to the month, the benchmark Nifty 50 staged a massive intraday recovery today, February 16, climbing over 200 points to settle firmly above the 25,650 mark.
At FinanceVetted, we’re looking past the daily noise to see why domestic “Big Money” is buying the dip even as wholesale inflation starts to creep back up.
The Inflation Surprise: WPI Hits 1.81%
India’s Wholesale Price Index (WPI) inflation accelerated to 1.81% in January, up from 0.83% in December.
- The Culprits: Higher costs in basic metals, textiles, and a slight rebound in food articles (1.41%).
- The Vetted Verdict: Normally, rising inflation scares investors. However, the market is viewing this as “productive inflation”—a sign that manufacturing demand is picking up.
Why the Rebound Happened Today
- Banking Strength: The “heavyweights” returned. HDFC Bank (up 2.39%) and Axis Bank (up 1.93%) did the heavy lifting, proving that the financial sector remains the backbone of this rally.
- Reliance Factor: Reliance Industries added another 1%, helping the Nifty reverse its two-day sliding streak.
- PSU Bank Buzz: The Nifty PSU Bank index rose over 1%, led by gains in Canara Bank and Bank of India.
What to Watch for Tomorrow
With U.S. markets reopening Tuesday, expect some volatility as global liquidity returns. The key level for the Nifty remains 25,700. A sustained move above this could trigger a fresh run toward all-time highs.