Drop in inflation raised hopes of monetary easing.
New Delhi: Markets posted strong gains with both the Sensex and Nifty closing above 1.30 percent as lower inflation figures gave way to expectations of an ease in the monetary policy by the Reserve Bank of India in its February policy review.
The BSE Sensex jumped 464.77 points or 1.30 percent to 36,318.33 while the NSE Nifty jumped 149.20 points or 1.39 percent to 10,886.80.
Continued decline in food prices pulled down retail inflation to an 18-month low of 2.19 percent in December 2018. Another set of official data showed that the wholesale inflation too eased to an eight-month low of 3.80 percent in December on softening fuel and food prices.