Index heavyweights, firm global cues drive Sensex 200 pts higher; Nifty nears 22,400

Overnight data showed U.S. consumer prices increased a solid 0.36% in February against expectations for a 0.3% rise, amid higher costs for fuel and shelter, though on an annual basis, core CPI slowed slightly to 3.8%.

Meanwhile, India's retail inflation eased slightly to 5.09% in February from 5.1% in January, data showed after market hours on Tuesday.

From the Sensex pack, , , , , , and opened with gains, while , , , and opened with cuts.

ITC shares rose 8.6% in early trade amid reports that London's British American Tobacco (BAT) today likely sold 3.5% stake in FMCG major in block deals to institutional investors.

shares fell 9% in early trade as to sell up to 2% equity stake in Sanghi Cements to ensure compliance with shareholding norms.

On the sectoral front, FMCG rose 1.75%, led by ITC. Nifty IT and Bank also surged, while Nifty Auto, Media, Metal, Pharma, Realty, Healthcare, and Oil & Gas declined.

In the broader market, Nifty Midcap100 and Smallcap100 fell 1% each.

Experts Take
"In the near-term investors should focus on the sustained weakness in the broader market, particularly the Smallcap segment. It is important to understand that 396 stocks are in the lower circuit indicating that there is more pain to come in this segment," said V K Vijayakumar, Chief Investment Strategist at .

" has joined two other leading funds in stopping lump sum investments in their mid and smallcap schemes. More are likely to follow. The net impact of this shift would be more money flowing into largecaps. outperformance is likely to continue," Vijayakumar said.

Deepak Jasani, Head of Retail Research at HDFC Securities, said, "Nifty could now stay in the 22224-22526 band for the near term."

Global Markets
Asian shares notched seven month highs on Wednesday, on the back of record peaks on Wall Street, as investors mostly shrugged off slightly hotter-than-expected U.S. inflation, betting it won't derail interest rate cuts expected by the middle of the year.

The S&P 500 rose 1.1% to log a record closing high. Shares of database giant Oracle rose 12% after the company beat profit estimates and mentioned an upcoming join announcement with market darling Nvidia. Early trade in Tokyo was steady. The Hang Seng advanced 0.4% to 3-1/2 month highs.

U.S. Treasury yields rise
U.S. Treasury yields rose after the reading, with two-year yields finishing the New York session 6.5 basis points higher at 4.599% and 10-year yields climbing 5.1 bps to 4.155%.

FII/DII Tracker
Both foreign portfolio investors and domestic institutional investors were net buyers of Indian equities on Tuesday, adding shares worth Rs 73.12 crore and Rs 2,358 crore, respectively.

Oil Prices Rise
Oil prices rose on Wednesday on expectations of strong global demand, including in the world's top consumer the United States, and as even somewhat sticky U.S. inflation did not dent expectations the Fed might start cutting rates soon.

Brent futures for May delivery were up 51 cents, or 0.62%, at $82.43 a barrel. The April U.S. West Texas Intermediate (WTI) crude contract rose 51 cents, or 0.67%, to $78.08.

Rupee Weakens
The Indian rupee fell 5 paise to 82.85 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.05% to 102.9 level.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)