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Indian shares opened higher on Wednesday, after U.S. consumer prices rose less than expected in November, boosting bets the Federal Reserve will slow the pace of rate increases and eventually stop in 2023.

The Nifty 50 index was up 0.37% at 18,679.70, as of 09:25 a.m. IST, and the S&P BSE Sensex rose 0.38% to 62,772.52.

All the major sectoral indexes barring Nifty FMCG advanced, with Nifty IT and Nifty Metal, rising nearly 1% each.

Wall Street closed higher overnight after data showed consumer price index in November rose 0.1%, after advancing 0.4% in October. Economists polled by Reuters had forecast the CPI gaining 0.3%.

The market focus now shifts to the Fed's policy decision scheduled at 00:00 a.m. IST on Thursday (1900 GMT).

The U.S. central bank is seen raising interest rates by 50 basis points, a smaller increase than the 75 bps per meeting pace that Fed stuck to since June 2022, with a smaller 25 bps hike in February.

Asian markets opened higher with the MSCI Asia ex Japan rising 0.79%.

The U.S. data comes after India's retail inflation reading that came in within the Reserve Bank of India's target range of 2%-6% for the first time in 10 months.