Indian equity gauges Sensex and Nifty strengthened gains for the second session in a row on Wednesday as easing domestic inflation further boosted investor confidence.
The BSE Sensex started on a positive note and went on to hit the day’s high at 62,835. After easing some of its intraday gains, the index finally settled higher by 145 points or 0.23 percent at 62,678.
Likewise, the NSE barometer Nifty rose 52 points or 0.28 percent to close the session at 18,660.
On the Sensex chart, tech Mahindra, Tata Steel, IndusInd Bank, SBI and PowerGrid emerged as major gainers – rising as much as 1.81 percent.
The Sensex breadth was in favour of buyers as 21 shares ended in the green.
Among the laggards were Nestle, ICICI Bank, Asian Paints, Bharti Airtel and HUL.
Sectorally, BSE Metal, Realty and Capital Goods were the top three performers, up in the range of 0.90 percent to 1.55 percent.
“Markets traded range bound today on the back of a favorable WPI print with action witnessed in select IT names as well as PSU Banks. Investors were keenly accumulating capex driven stocks including Railway stocks as many of them were buzzing around on hopes of renewed capex from the GOI. Select Auto Component stocks witnessed accumulation during trade today,” said S Ranganathan, Head of Research at LKP securities.
After a drop in November retail inflation, India’s wholesale price inflation for the month of November has declined to a 21-month low of 5.85 per cent year-on-year, down from 8.39 per cent in October.
Retail inflation as recorded by Consumer Price Index (CPI) cooled to an 11-month low of 5.88 per cent year-on-year in November, down from 6.77 per cent in October this year.
Globally, investors also cheered a smaller-than-expected rise in US consumer prices, raising hopes that the US Federal Reserve will slow the pace of rate hikes.
The US Fed is expected to raise interest rates by 50 basis points later in the day, with a smaller 25 bps hike in February. The American central bank has raised its policy rate by 375 bps since March this year, including four consecutive 75 bps hikes.
The Fed’s policy decision is due later tonight, followed by a press conference with Fed chief Jerome Powell.
In other Asian markets, shares rose after data showed that US consumer prices barely rose in November, signaling that inflation has peaked and Fed might slow the pace of interest rate increases.
The US consumer price index rose 0.1 percent last month, 0.2 percentage points slower than economists expected, and in the 12 months through November, headline CPI climbed 7.1 percent.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1 percent. The index is up 1.2 percent so far this month.
