Sensex, Nifty rally more than 1% as investors cheer softer U.S. inflation number

Benchmark equity indices Sensex and Nifty jumped more than 1% on Wednesday

Benchmark equity indices Sensex and Nifty jumped more than 1% on Wednesday following heavy buying in IT, banking and oil & gas shares amid a global stocks rally on softer U.S. inflation data.

An encouraging U.S. inflation data has raised hopes for an end to interest rate hikes by the Federal Reserve.

The 30-share BSE Sensex jumped 742.06 points or 1.14% to settle at nearly a four week’s high of 65,675.93. During the day, it zoomed 813.78 points or 1.25% to 65,747.65. As many as 27 Sensex shares closed in the green while three in the red.

The Nifty50 of National Stock Exchange climbed 231.90 points or 1.19% to 19,675.45.

Among the Sensex firms, Tech Mahindra rose the most by 3.77%. Tata Motors, Infosys, Wipro, Tata Steel, Tata Consultancy Services, Reliance Industries and Axis Bank were the major gainers.

“The market’s strong gap-up jump in response to positive global cues on account of the softer than anticipated U.S. and U.K.’s inflation data, highlights the optimism for an end to the interest rate cycle, as evidenced by the ease in bond yields.

“This is likely to draw FII flows into emerging markets, which is good for India considering the current better earnings season and the festive demand pick-up. The drop in the CPI for India also improved the mood. The rebound was broad based with IT, realty, oil & gas, metal, and auto leading the way,” said Vinod Nair, Head of Research at Geojit Financial Services.