(Corrects IST for Fed decision in seventh paragraph to 00:30 a.m from 00:00 a.m.)
BENGALURU (Reuters) -Indian shares rose on Wednesday, led by information technology stocks, after a smaller-than-expected rise in U.S. consumer prices boosted bets that the Federal Reserve will slow the pace of rate increases and eventually stop in 2023.
The Nifty 50 index was up 0.44% at 18,688.95, as of 11:30 a.m. IST, and the S&P BSE Sensex rose 0.42% to 62,788.74.
Data on Tuesday showed the U.S. consumer price index (CPI) rose 0.1% in November, after advancing 0.4% in October. Economists polled by Reuters had forecast the CPI gaining 0.3%.
“Markets will definitely cheer a moderation in rate hike cycle as well as the bottoming out of inflation,” said Avinash Gorakshakar, head of research at Profitmart Securities.
A slightly dovish commentary from Fed Chair Jerome Powell could trigger a near-term bounce in Indian markets as well, Gorakshakar added.
The U.S. central bank is expected to raise interest rates by 50 basis points later in the day, with a smaller 25 bps hike in February. The Fed has raised its policy rate by 375 bps since March including four consecutive 75 bps increases.
The Fed’s policy decision is due at 00:30 a.m. IST on Thursday (1900 GMT), followed by a press conference with Powell.
All the major sectoral indexes barring the Nifty FMCG advanced, with the Nifty IT rising nearly 1%, the most in nearly two weeks.
The IT index had snapped a seven-day losing streak on Tuesday.
“When you get corrections in IT stocks, you buy”, said Neeraj Dewan, director at Quantum Securities.
The sector would not lose sheen for long-term investors irrespective of downbeat commentary from IT companies, Dewan said referring to HCL Technologies Ltd warning of furloughs and spending cuts by U.S. clients.
($1 = 82.3750 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Eileen Soreng)
