Indian shares rallied on Friday, with sentiment boosted by a rise in rupee and better-than-expected WPI inflation data.
The markets rose across Asia and Europe, tracking gains on Wall Street overnight, as upbeat U.S. data eased global growth worries and reports suggested that the U.S. Federal Reserve would quell investor fears on QE tapering at its June 18-19 policy meeting.
Investors seem to believe that the exit from stimulus will be slow and gradual to keep interest rates low as long as possible. With risk sentiment improving slightly, the rupee was trading firm at 57.64/65 per dollar compared with Thursday's closing value of 57.98 per dollar.
Buying remained broad-based, with rate-sensitive banking, auto and realty stocks leading the rally as encouraging WPI inflation data rekindled expectations of a rate cut at RBI's mid-quarter policy review slated for June 17.
Data published by the Ministry of Commerce and Industry showed that the nation's headline inflation rate slowed to a 43-month low of 4.7 percent in May from 4.89 percent in the previous month, driven by declining prices of fuel and manufactured products. This is the second month in a row that inflation has fallen below RBI's comfort level of 5 percent.
The ministry revised March WPI inflation downwards to 5.65 percent from 5.96 percent. Finance Minister P Chidambaram said he expects the RBI to take correct decision.
Rising from a two-month low, the benchmark Sensex ended the session up 350 points or 1.9 percent at 19.1890. The broader Nifty index jumped more than 100 points or 1.9 percent to end above 5.800.
Tata Motors soared 4.8 percent after its U.K.-based subsidiary, Jaguar Land Rover Automotive Plc., reported a 12 percent rise in May sales. Maruti Suzuki soared over 4 percent, Mahindra & Mahindra gained 2.6 percent and Bajaj Auto closed up 2.9 percent.
State Bank of India rose 1.4 percent, while private sector lender ICICI Bank rallied 3.1 percent and Axis Bank advanced 2.2 percent. Software services exporter Infosys closed 0.8 percent higher after announcing a wage hike for its employees and ahead of its Annual General Meeting on Saturday.
Energy giant Reliance Industries climbed 3.4 percent after its KG-D6 block partner Niko Resources said its proved reserves increased by 160 percent. Aluminum major Hindalco Industries soared 8.5 percent on short covering after recent sharp losses.
Jet Airways jumped 9.5 percent ahead of a FIPB meeting today to discuss the Rs 2058 crore Jet-Etihad deal.
Apollo Tyres plunged 5.7 percent on continued worries that its debt levels will rise after the company agreed to buy U.S.-based Cooper Tire & Rubber Company in an all-cash transaction for around Rs 14,500 crore.
State Trading Corporation of India plummeted 17 percent, extending Thursday's 20 percent plunge, after the government divested a 9 percent stake in MMTC at a steep 68 percent discount to its current market price.
Hindustan Unilever edged down 0.2 percent after its parent Anglo-Dutch consumer goods giant Unilever Plc received market regulator SEBI approval for its $5.4 billion voluntary open offer to increase stake in its Indian subsidiary.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.