Indian markets rise 0.5% as cooling inflation lifts sentiment; small and mid-cap indices gain 0.7% each in broad rally.

• Investors hope softer inflation gives RBI room to ease rates; all 13 sectors post gains across the board.
• Hero Moto jumps 4% on European plans; Sun Pharma rises 2.1% after U.S. launch of new anti-baldness drug.
• HCLTech drops 3.3% after cutting margin outlook, raising concerns over weak IT sector client spending.