Domestic markets are expected to reverse direction on Friday, as US stocks saw strong rally on Thursday. SGX Nifty indicates that Nifty may top 18,400.

Analysts said the market to remain in consolidation phase, with the return of FPIs and better-than-expected quarterly results from India Inc.

US inflation

US stocks are rallying as Wall Street finally sees light at the end of the Fed’s tightening cycle tunnel. This cool inflation report helped stocks post their best trading day in two years. Treasury yields are in freefall, the dollar is tanking, and practically every risky asset is rejoicing over this inflation report, said Edward Moya, Senior Market Analyst, The Americas OANDA.

The headline reading dropped more than expected to 7.7% from a year ago, which is noticeably better than the peak reading from June of 9.1%.

“This inflation report was a nice surprise. Inflation has been very slow to come down, but this report gives up hope that this deceleration with pricing pressures might bring back hopes of a soft landing,” he added.

Following the US stocs, equities across Asia pacific region are up over 2-3.5 per cent. Overnight, the Dow Jones Industrial Average jumped 908 points, or 2.8%. The S&P 500 jumped 3.6%, while the Nasdaq surged more than 4.9%.

Technically, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities, the positive chart pattern like higher tops and bottoms continued on the daily chart and Thursday’s swing low could be considered as a new higher bottom of the sequence. A sustainable move above 18100 levels could confirm higher bottom reversal and that could open another round of upside bounce. Immediate support is placed at 17950 levels.

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