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PSU stocks posted strong gains on Wednesday as the benchmark indices erased morning losses.

PSU stocks index is up 2.8 per cent with many shares posting strong gains. Nalco is up 11 per cent, Hudco is up 9 per cent, KIOCL is up 7 per cent, SJVN is up 7 per cent, Indian Bank is up 6 per cent, RITES is up 6 per cent.

PSU oil stocks are climbing with BPCL, HPCL up 6 per cent. LIC is up 5 per cent, IRCON is up 5 per cent, NBCC is up 5 per cent.

Infrastructure stocks are gaining as the index is up 1.7 per cent. IRB is up 10 per cent, Oil India is up 4 per cent, ONGC is up 3 per cent, GAIL is up 2 per cent.

BSE Sensex is trading at 71,527.38 points, down 27.81 points. SBI is top gainer with gains of more than 4 per cent. Tech Mahindra is down more than 2 per cent.

A major catalyst driving the rally in global equity markets has been expectations of rate cut by the Fed, says V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The Fed had indicated possibly three rate cuts in 2024 and markets had discounted up to five rate cuts. This was on expectations that inflation in the US will continue to trend down. This expectation has received a jolt from the US CPI inflation numbers rising year on year to 3.1 per cent against expectation of 2.9 per cent. This means that the Fed will certainly not cut rates in March and the number of rate cuts in 2024 also will be lower, he said.