Inflation data pushes indices up after 2 days; Sensex up 403 points

Sensex notched up smart gains on Tuesday after a twoday losing run as investors accumulated IT, finance and energy stocks in the wake of encouraging retail inflation data.

Retail inflation dipped below the RBI’s upper tolerance level of 6 per cent for the first time in 11 months in November as softening prices of food items brought relief, as per official data released post market hours on Monday.

However, country’s industrial production contracted by 4 per cent in October, the sharpest fall in 26 months, mainly due to a decline in output of manufacturing and subdued performance of mining and power generation sectors. After a subdued opening, the 30-share Sensex gained momentum as the session progressed to close 402.73 points or 0.65 per cent higher at 62,533.30.

Similarly, the broader NSE Nifty advanced 110.85 points or 0.60 per cent to end at 18,608. IndusInd Bank topped the Sensex gainers’ chart, spurting 2.46 per cent, followed by Bajaj Finance, Infosys, HCL Tech, M&M, TCS, Tech Mahindra and Bharti Airtel.

Only five counters closed in the red –Tata Steel, Nestle India, Maruti Suzuki, Titan and HUL, slipping up to 0.54 per cent.

Markets were on a firm footing on the back of short covering as retail inflation easing to 11-month low raised hopes that the rate hike regime could slow down and take a pause going ahead.

“Overnight gains in the US markets further aided the local market sentiment, which had slipped into a rangebound mode over the past few sessions,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.