The Sensex leapt by more than 742 points on Wednesday, buoyed by a global rally after data showed that US inflation in October had cooled to a lower-than-anticipated 3.2 per cent. The benign inflation number sparked optimism that the US Federal Reserve would pause on interest rates — and might even consider the possibility of paring lending rates in 2024.

The 30-share gauge, which acts like a bellwether of the market’s mood, zoomed 1.14 per cent, or 742.06 points, to settle at 65675.93. Earlier in the day, it had surged to a high of 65747.65.

At the NSE, the Nifty 50 gained 231.90 points, or 1.19 per cent, to finish at 19675.45. In the broader market, the BSE Smallcap Index jumped 1.13 per cent, and the Midcap Index advanced 0.91 per cent.

The broad-based rally saw investors’ wealth balloon by Rs 3.29 lakh crore.

There was more good news for investors as data released in the UK showed inflation cooling to 4.6 per cent in October, which was sharply lower than the 6.7 per cent in the preceding month. It also came below economists’ prediction of 4.8 per cent.

Retail inflation in India tumbled to a five-month low of 4.87 per cent in October, which also drove the rally.

“Domestic equities surged higher, fuelled by the moderation in inflation in India and the US. The rally was seen in the global markets after the weak US inflation data raised hopes that the interest rate-hiking cycle had reached its peak.

“Additionally, news of fresh stimulus in China and a sharp fall in the UK’s inflation boosted the sentiments. We expect market to maintain its momentum, driven by positive domestic data, and the cooling of US bond yields and dollar index,” Siddhartha Khemka, head — retail research, Motilal Oswal Financial Services, said.

On Tuesday, yields on the benchmark 10-year US treasury fell more than 18 basis points to 4.45 per cent, while the Dollar Index crashed nearly 1.50 per cent.

In the Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled higher while the European markets were trading in the green.

“The market’s strong gap-up opening in response to positive global cues on account of the softening inflation data in the US and the UK fuelled optimism that the interest rate cycle was drawing to an end. This is likely to draw FII flows into emerging markets. This is good for India considering the strong earnings season and the pick-up in festive demand,” said Vinod Nair, head of research at Geojit Financial Services.