BENGALURU: India’s benchmark index Nifty 50 surged to record closing high on Wednesday, boosted by state-owned companies, while investors awaited key inflation readings and the Federal Reserve’s rate decision.

The NSE Nifty 50 settled 0.25% higher at 23,322.95, while the S&P BSE Sensex added 0.20% to 76,606.57.

The Nifty 50 rose as much as 0.65% to a record high in early trade before surrendering some gains.

After dropping 15% on June 4, when India’s election results came in, state-owned banks have risen 9.4% in six sessions, while the Nifty public sector index has climbed 12%.

Prime Minister Narendra Modi has won a rare third straight term with the help of allies.

There is scope for further upside for growth in financials and public sector companies on policy continuity and expectations of new programmes from the government, Deven Choksey, managing director at DRChoksey FinServ, said.

Indian shares remain muted ahead of Fed decision, inflation data

On Wednesday, 10 of the 13 major sectors logged gains. Heavyweight financials rose 0.48%, while public sector banks jumped 1.2%. State-owned firms, up 1.4%, led gains in major sectors.

Nifty oil and gas and Nifty energy rose about 0.9% each. Coal India and Power Grid, the top two Nifty 50 gainers, both rose 2.6%.

Meanwhile, IT companies, which gain a chunk of their revenue from the U.S., closed little changed.

U.S. inflation data and the Fed’s policy decision are due on Wednesday.

If U.S. inflation is below expectation and commentary from the Fed hints at a rate cut this year, we could see a big jump in markets, Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management said.

Policymakers’ updated “dot plot” and comments will be closely watched for how soon rate cuts could begin.

Meanwhile, India’s inflation, due after market, is expected to have picked up to 4.89% in May.