Positive inflation data further spurs up indices

Mumbai: Benchmark indices Sensex and Nifty ended with gains on Wednesday, extending their previous day rally amid lower level of inflation on domestic front and better-than-expected inflation readings from the US. The 30-share BSE Sensex climbed 144.61 points or 0.23 per cent to settle at 62,677.91. During the day, it jumped 301.81 points or 0.48 per cent to 62,835.11. The broader NSE Nifty advanced 52.30 points or 0.28 per cent to end at 18,660.30.

"Nifty rose for the second consecutive session, in line with most Asian markets that were up. Sharp fall in WPI inflation for November also helped sentiments," said Deepak Jasani, Head of Retail Research, HDFC Securities.

"Better-than-expected inflation readings from major global economies, combined with increased appetite for IT stocks, aided the domestic market's bullishness. US CPI inflation easing to 7.1 per cent in November will lower the chances of the Fed being hawkish. Though the Fed is largely expected to raise rates by 50 basis points, their comments on future inflation and rate actions would dominate market movements," said Vinod Nair, head (research) at Geojit Financial Services.

"All eyes will be on the US Federal Open Market Committee (FOMC) meeting on interest rate later in the day, as the outcome would set the tone for the rest of the equity markets across the globe," said Prashanth Tapse research analyst at Mehta Equities Ltd. Foreign Institutional Investors (FIIs) turned buyers as they bought shares worth Rs 619.92 crore on Tuesday, according to exchange data.

In the broader market, the BSE smallcap gauge climbed 0.68 per cent and midcap index advanced 0.59 per cent.

Among sectors, metal jumped 1.55 per cent, realty (1.44 per cent), IT (0.89 per cent), industrials (0.81 per cent), commodities (0.80 per cent) and consumer discretionary (0.55 per cent). FMCG was the only laggard.