Indian shares rise as easing inflation boosts gains
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-Indian shares closed higher on Tuesday as cooling inflation helped lift stocks across sectors, while broader risk sentiment improved on hopes of an upcoming pause in rate hikes by the U.S. Federal Reserve.
The blue-chip Nifty 50 index closed 0.62% higher at 18,716.15, while the benchmark S&P BSE Sensex rose 0.67% to 63,143.16.
Twelve of the 13 major sectoral indexes logged gains, with FMCG climbing 1.38%. Realty stocks jumped 3% to a near five-month high, with various analysts saying the sector was "attractive" due to strong operational performance and the recent rate hike pause by the Reserve Bank of India.
The midcap index outperformed its larger peers, rising 1.2% to a fresh record high. Smallcaps added 0.7% to hit a new 52-week high.
Domestic inflation eased to a more than two-year low of 4.25% in May. Industrial output rose 4.2% year-on-year in April, well above the estimated 1.8% expansion.
"Favourable macroeconomic data, rising odds of a Fed rate pause augur well for Indian shares," Samrat Dasgupta, chief executive at Esquire Capital Investment Advisors said, adding that monsoons could be a defining factor for the trajectory of markets in the near term.
Global equities rose ahead of U.S. inflation data on Tuesday and Fed's policy decision on Wednesday. The odds of a rate pause stood above 75%. [FEDWATCH]
Among individual stocks, India's largest firm by market capitalisation and the stock with the highest weightage in Nifty 50, Reliance Industries rose nearly 1.5% and led the index gains after global brokerage Bernstein reiterated "outperform", citing potential gains from clean energy segment.
Mankind Pharma advanced over 3% after global brokerage JP Morgan initiated coverage with an "overweight" rating, on hopes of continued market share gains and strong volume growth.
($1 = 82.3853 Indian Rupees)
