(Reuters) – Indian shares rose in broad-based gains on Wednesday as softer-than-expected U.S. and domestic inflation data boosted hopes of further rate cuts.
The Nifty 50 was up 0.75% at 24,762.2 and the BSE Sensex added 0.65% to 81,677.4 as of 10:22 a.m. IST.
All 13 major sectors advanced, led by metals and information technology, which rose 2.5% and 1.1%, respectively.
U.S. consumer inflation picked up 0.2% in April, lower than the 0.3% monthly rise estimated by economists polled by Reuters.
IT stocks, which get a significant chunk of their revenue from the United States, are being supported by encouraging U.S. inflation data that bodes well for tech spending in the world’s largest economy, said Prem Doshi, founder and fund manager at ACE Equities.
A drop in dollar after benign U.S. inflation data and optimism over U.S.-China truce boosted Indian metal stocks, analysts said.
Heavyweight Tata Steel surged 4.7%, leading gains on the metals index, with multiple brokerages highlighting strong volume growth and cost optimization as key positives for the company. The steelmaker reported a fourth-quarter profit beat on Monday.
Meanwhile, India’s retail inflation slowed to a near six-year low on Tuesday, raising expectations for further rate cuts by the central bank.
“This will be not just a positive for the domestic interest rate sensitive sectors, but the entire market as lowering credit costs will boost corporate profitability,” said Saurabh Jain, assistant vice president of research of retail equities at SMC Global.
However, market participants remain cautious over foreign flows shifting to China after it struck a deal with the U.S. to temporarily slash reciprocal levies.
Broader small-cap and mid-cap indexes rose about 0.8% each on Wednesday, extending their outperformance over the benchmarks, driven by post-earnings rallies in key constituents.
Among other stocks, Bharti Airtel jumped about 2% after reporting better-than-expected quarterly earnings on steady subscriber additions and higher revenue per user.
(Reporting by Vivek Kumar M and Bharath Rajeswaran; Editing by Sumana Nandy and Sonia Cheema)
