MUMBAI: Indian equity markets closed higher on Wednesday, buoyed by a significant drop in retail inflation to a six-year low in April.
The Sensex gained 182 points to settle at 82,150, while the Nifty50 rose 0.7 per cent to close at 24,660.
Investor sentiment was uplifted by the latest Consumer Price Index (CPI) data, which showed retail inflation easing to 3.16 per cent in April from 3.34 per cent in March, marking the lowest level since July 2019.
 The moderation in retail iinflation was primarily driven by a sharp decline in food prices, with food inflation dropping to 1.78 per cent – the lowest since October 2021.
Notably, vegetable prices fell by 11 per cent year-on-year, contributing significantly to the overall decrease.
Further cuts on cards?
This softer inflation print has bolstered expectations for further interest rate cuts by the Reserve Bank of India (RBI) to stimulate economic growth.
Economists anticipate that the RBI may implement additional rate reductions in upcoming policy meetings, depending on economic data and monsoon performance.
Market gains were led by financial and IT stocks sectors that are particularly sensitive to interest rate movements. The positive inflation data also aligned with lower-than-expected figures from the US, further enhancing investor optimism.
In summary, the combination of easing inflation and the prospect of monetary policy support has provided a favourable backdrop for Indian equities, encouraging investor participation and supporting market
