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India's equity indices closed higher on Friday as global markets rallied after the latest economic data from the US faded out chances of recession in the world's largest economy.

At Closing, Sensex was up 1.68 per cent or 1,330 points at 80,436 and Nifty was up 1.65 per cent or 397 points at 24,541.

Wipro, Tech Mahindra, M&M, Tata Motors, Ultratech Cement, TCS, HCL Tech and ICICI Bank contributed the most to the gains in the Sensex. Sun Pharma was the only loser in the BSE benchmark.

Buying was also seen in the midcap and smallcap stocks. Nifty midcap 100 index was up 1,108 points or 1.96 per cent to 57,656 and Nifty smallcap 100 was up 349 points or 1.93 per cent at 18,436.

The market breadth was skewed in the favour of the buyers. Around 2,440 stocks advanced, 1,493 declined, and 97 closed unchanged on the BSE.

Among the sectoral indices auto, IT, PSU Bank, fin service, FMCG, metal, realty, service sector and PSE were major gainers.

A lot of positive data came from the US in the last few days. In July, US consumer price inflation dropped to 2.9 per cent, the first time since March 2021 that it has fallen below 3 per cent.

Jobless claims also decreased to 227,000, the lowest in five weeks, against market expectations of 236,000. The IT sector extended its rally for the fifth consecutive day, rising nearly 2.5 per cent, as softer inflation strengthened the case for a Federal Reserve rate cut in September.

According to the market experts, "The stability of the JPY has been instrumental in driving a global market recovery. Besides that, the strong US retail sales and a decline in weekly jobless claims have helped alleviate fears of a US recession. Further, the market sentiment has improved due to a decrease in US CPI inflation."