A benchmark index of Indian equities markets Wednesday closed 256 points or 1.22 percent higher on fall in headline inflation in December.

Markets were upbeat after official data showed a decline in wholesale price index (WPI) at 6.16 percent in December, the lowest in five months, on the back of slower rise in food prices.

The decline in headline inflation is expected to help the Reserve Bank of India not to raise the policy rates in its next monetary policy review later this month.

“The sharp fall in the overall CPI (Consumer Price Index) and WPI inflation may result in a status quo from the RBI on January 28, especially with the subdued IIP (Index of Industrial Production) data in the background,” said Dipen Shah, head, private client group research, Kotak Securities.

The 30-scrip S&P Sensex of the Bombay Stock Exchange (BSE), which opened at 21,091.46 points, closed at 21,289.49 points, up 256.61 points or 1.22 percent from its previous day’s close at 21,032.88 points.

The Sensex touched a high of 21,302.73 points and a low of 21,091.46 intra-day.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed trade 101.30 points or 1.64 percent up at 6,272.75 points.

According to WPI data released by the ministry of commerce and industry, prices of food articles increased by 13.68 percent in December year-on-year. This is sharply lower than 19.93 percent jump registered in the previous month.

The retail inflation based on the CPI too declined to 9.87 percent in December from 11.16 percent in the previous month.

In Wednesday’s trade, the S&P BSE bank index was up 199.34 points followed by capital goods index which gained 187.91 points. The automobile index moved higher by 145.69 points, and so did metal index, up 104.25 points, and information technology index, up 66.76 points.

However, consumer durables index was down 42.42 points and healthcare index was lower by 1.70 points.

All 30 of the sensitive stocks of the barometer index made gains in the day’s trade.

Major gainers were: Larsen and Toubro (L&T), up 2.71 percent at Rs.998.80; HDFC, up 2.56 percent at Rs.844.95; Sesa Sterlite, up 2.36 percent at Rs.197.10; BHEL, up 2.15 percent at Rs.166.20; and ICICI Bank, up 2.00 percent at Rs.1,058.35.

Among the Asian markets, Japan’s Nikkei closed 2.50 percent up, while Hong Kong’s Hang Seng gained 0.49 percent. China’s Shanghai Composite Index went down by 0.17 percent.

In Europe, London’s FTSE 100 was trading 0.31 percent up. Similarly, Germany’s DAX Index was higher by 0.98 percent and the French CAC 40 Index edged up by 0.52 percent.