The Bombay Stock Exchange Sensex rose by 190.98 points to 26,496.78 and the National Stock Exchange Nifty gained 52.75 points to reach 8,161.10 during early trading on Wednesday as markets responded positively to inflation data released on Tuesday, PTI reported. Inflation based on the wholesale price index fell to a four-month low of 3.39% in October and consumer price index inflation fell to a 14-month low of 4.20%.
Rallies by global markets as well as in oil prices contributed to the positive movement. Strong buying in auto and information technology stocks also boosted markets, with the IT index of the NSE rising by over 2%. Tata Consultancy Services was the top gainer with a 4% rise in its stock price, with Asian Paints, ONGC and Zee Entertainment also performing well, according to NDTV.
The fall in inflation rates , along with the demonetisation of Rs 500 and Rs 1,000 currency notes, could allow the Reserve Bank of India to lower its policy rates during its December review. On October 4, the newly-formed Monetary Policy Committee had cut RBI’s repo rate – the rate at which it lends to commercial banks – by 25 basis points (or 0.25%) to 6.25%.