BENGALURU: Indian shares ended higher on Wednesday, led by information technology and metal stocks, as cooler-than-expected US inflation data boosted bets that the Federal Reserve will slow the pace of interest rate hikes.

The Nifty 50 index closed up 0.28% at 18,660.30, and the S&P BSE Sensex rose 0.23% to 62,677.91. Both the indexes had risen 0.5% during the session.

Data on Tuesday showed the US consumer price index (CPI) rose 0.1% in November, after advancing 0.4% in October. Economists had forecast the CPI gaining 0.3%.

The US data comes after India’s retail inflation reading came in within the Reserve Bank of India’s target range for the first time in 10 months.

“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 US central bank is expected to raise interest rates by 50 basis points at the end of its two-day policy meeting on Wednesday. Traders are also expecting smaller 25 bps hikes in the first two meetings of 2023.

The Fed’s policy decision is due at 00:30 a.m. IST on Thursday (1900 GMT), followed by a press conference with Powell.

The Nifty IT and Nifty Metal were among the top sectoral gainers, rising more than 1%. The IT index snapped a seven-day losing streak on Tuesday.