Drop in wholesale inflation cheers markets

Mumbai: The BSE benchmark Sensex surged 600 points on Tuesday, propelled by market heavyweight RIL, ITC, banking and IT shares amid positive global cues. Sliding crude oil prices in the international markets and buying by foreign investors also bolstered sentiment, traders said. The 30-share BSE Sensex ended 600.42 points or 0.99 per cent higher at 61,032.26. During the session, the index witnessed a high of 61,102.74 and a low of 60,550.25. The broader NSE Nifty surged 158.95 points or 0.89 per cent to finish at 17,929.85.

ITC topped the Sensex gainers' chart with a jump of 3.31 per cent, followed by Reliance Industries, Bajaj Finance, ICICI Bank, Infosys, Axis Bank and Wipro. On the other hand, NTPC, UltraTech Cement, L&T, Sun Pharma, Asian Paints and Maruti were among the major laggards, shedding as much as 1.10 per cent.

"Domestic indices edged higher, inspired by their global counterparts, as investors await the US inflation numbers today. The whammy over India's retail inflation breaching the RBI's tolerance level was cooled by WPI inflation easing to 4.73 pc in January. IT stocks were in focus as investors anticipated a slowdown in US inflation, which could result in favourable Fed policy," said Vinod Nair, head (research) at Geojit Financial Services. Foreign Institutional Investors (FIIs) remained net buyers in the capital market on Monday as they purchased shares worth Rs 1,322.39 crore, according to exchange data.

Retail inflation again breached the Reserve Bank's upper tolerance limit and touched a three-month high of 6.52 per cent in January, mainly due to higher food prices, as per official data released after market hours on Monday. However, the wholesale price-based inflation eased for the eight consecutive month to 4.73 per cent in January on easing prices of manufactured items, fuel and power.

Elsewhere in Asia, markets in Shanghai, Tokyo and Seoul posted gains, while Hong Kong settled lower. Bourses in Europe were trading in the positive zone in the afternoon session. The US markets had ended significantly higher in the overnight session. The rupee fell by 12 paise to close at 82.82 (provisional) against the US dollar on Tuesday, as market participants remained on the sidelines ahead of the US inflation data.