Indian shares rise as easing inflation boosts gains

BENGALURU, June 13 (Reuters): Indian shares closed higher on Tuesday as cooling inflation helped lift stocks across sectors, while broader risk sentiment improved on hopes of an upcoming pause in rate hikes by the US Federal Reserve.
The blue-chip Nifty 50 index closed 0.62 per cent higher at 18,716.15, while the benchmark S&P BSE Sensex rose 0.67 per cent to 63,143.16.
Twelve of the 13 major sectoral indexes logged gains, with FMCG climbing 1.38 per cent. Realty stocks jumped 3 per cent to a near five-month high, with various analysts saying the sector was "attractive" due to strong operational performance and the recent rate hike pause by the Reserve Bank of India.
The midcap index outperformed its larger peers, rising 1.2 per cent to a fresh record high. Smallcaps added 0.7 per cent to hit a new 52-week high.
Domestic inflation eased to a more than two-year low of 4.25 per cent in May. Industrial output rose 4.2 per cent year-on-year in April, well above the estimated 1.8 per cent expansion.
"Favourable macroeconomic data, rising odds of a Fed rate pause augur well for Indian shares," Samrat Dasgupta, chief executive at Esquire Capital Investment Advisors said, adding that monsoons could be a defining factor for the trajectory of markets in the near term.
Global equities rose ahead of US inflation data on Tuesday and Fed's policy decision on Wednesday. The odds of a rate pause stood above 75 per cent.
Among individual stocks, India's largest firm by market capitalisation and the stock with the highest weightage in Nifty 50, Reliance Industries rose nearly 1.5 per cent and led the index gains after global brokerage Bernstein reiterated "outperform", citing potential gains from clean energy segment.
Mankind Pharma advanced over 3 per cent after global brokerage JP Morgan initiated coverage with an "overweight" rating, on hopes of continued market share gains and strong volume growth.