Stock markets in India have continued their momentum and are presently trading on a positive note. All sectoral indices are trading on a positive note with stocks in the banking sector and FMCG sector witnessing maximum buying interest. Metal stocks are trading in the red.

The BSE Sensex is trading up 362 points (up 1%) and the NSE Nifty is trading up 74 points (up 0.7%). The BSE Mid Capindex is trading down by 0.4%, while the BSE Small Cap index is trading flat. The rupee is trading at 63.83 to the US dollar.

In the news from the global financial markets, US industrial production increased more than expected in December. This was seen as unseasonably cold weather at the end of the year boosted demand for heating.

Industrial output surged 0.9% in December after slipping 0.1% in November. This was seen on the back of robust gains in mining production.

For all of 2017, industrial output rose 1.8% – the first and largest increase since 2014.

In another report, the Federal Reserve also stated that the US economy and inflation expanded at a modest-to-moderate pace from late November through the end of 2017, while wages continued to push higher.

As per the report, several regional Fed districts observed increases in manufacturing, construction, and transportation input costs. Others reported expectations of further wage increases in the coming months, though prices pressures were still mixed.

Whether the report will alleviate the Fed's concerns about tepid inflation is still unclear. Note that the inflation in US has remained below the central bank's 2% target for more than five years now.

Despite the weak inflation overall, Fed policymakers currently expect to raise interest rates three times this year. The central bank raised rates three times in 2017 against a backdrop of steady growth and low unemployment.

Note that with the US economy chugging along for many months, the Fed is now gradually easing off the stimulus it provides to the economy by raising interest rates to more normal levels.