Indian shares soar as softer-than-expected U.S. inflation data fuels hopes of an end to rate hikes. Global market rally influences NSE Nifty 50 and S&P BSE Sensex gains across sectors, with IT and metals leading the way. Explore the impact on individual stocks and sectors in this market update.

Indian stocks experienced a surge on Wednesday, aligning with the global market trend, as softer-than-expected U.S. inflation data fueled optimism about a potential end to the rate-hiking cycle in the world's largest economy.

As of 9:54 a.m. IST, the NSE Nifty 50 index rose by 0.93% to reach 19,623.85, while the S&P BSE Sensex increased by 0.89% to 65,508.75. Notably, all 13 major sectors recorded gains, with a 1% increase in high-weight financials and a notable 2% jump in information technology (IT) stocks. IT companies, which generate a substantial portion of their revenue from the U.S., benefited from the positive sentiment following the soft U.S. inflation data.

The global market rally was evident as Wall Street equities climbed higher, and Asian markets also experienced significant gains on Wednesday.

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The impetus for the market movement came from the U.S. consumer price inflation (CPI) data for October, which showed no change, marking the first instance of such stability in over a year. This result contrasted with the 0.4% rise in September and surpassed the 0.1% increase forecasted by economists polled by Reuters. The data fueled hopes of a potential halt to the U.S. Federal Reserve's interest rate hikes, leading to a rally in stock markets and a decline in U.S. Treasury yields.

Sanjiv Bhasin, Director at IIFL Securities, commented on the situation, stating that with U.S. Treasury yields decreasing and the dollar remaining weak, an equity market rally is likely. Bhasin further noted that falling yields post-U.S. inflation data could attract foreign inflows back to domestic markets.

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In addition to the positive global cues, the metals sector saw a 2% gain, supported by better-than-expected industrial output growth in China for October. China, being the world's largest producer and consumer of metals, contributed to the positive market sentiment.

Hindalco Industries emerged as the top Nifty 50 gainer, experiencing a 5% jump. The realty sector also performed well, recording a gain of about 2.6% and reaching a record high. Domestic-focused small and mid-cap stocks increased by 1% and 0.7%, respectively.

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Among individual stocks, Manappuram Finance saw a notable surge of 9%, extending its post-earnings rally for the second consecutive session. The gold financier surpassed second-quarter profit estimates, driven by high demand for loans.

Overall, the Indian stock market responded positively to the global rally, with various sectors experiencing gains, propelled by favorable U.S. inflation data and the anticipation of a pause in interest rate hikes by the U.S. Federal Reserve.

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