Wall Street gains on inflation data, but rocky on geopolitics

Subject: Economy

Section: Inflation

Wall Street’s main indexes gained on Tuesday, shaking off an unconfirmed report of Russian missiles crossing into Poland that sparked volatility, as investors seized on softer-than-expected inflation data that raised hopes of a pullback in rate hikes by the U.S. Federal Reserve.
Equities were boosted by Tuesday’s inflation report that showed producer prices rising 8% in the 12 months through October against an estimated 8.3% rise.
The gains built on a rally that was kicked off late last week by a cooler-than-expected report on consumer prices.
The 10-year US Treasury yield, which shocked investors by leaping over5per cent in October, tumbled below 4.5percent following the soft inflation report in the US. Dow Jones index of the New York Stock Exchange gained 1.43 per cent on Tuesday. Nasdaq rose 2.37percent
The market’s strong gap up jumps in response to positive global cues on account of this often than anticipated US and UK inflation data highlights the optimism for an end to the interest rate cycle as evidenced by the ease in bond yields
This is likely to draw FPI flows in to emerging markets, which is good for India considering the current better earnings season and the festive demand pick-up. The drop in the retail inflation for India also improved the mood. India’s annual retail inflation eased to four-month low of 4.87 per cent in October from5.02percent in the previous month