The 30-share BSE Sensex gained as much as 226 points on Tuesday on expectations of further monetary easing by the Reserve Bank of India after a flat industrial output in April.
15:48The 30-share BSE Sensex gained as much as 226 points on Tuesday on expectations of further monetary easing by the Reserve Bank of India after a flat industrial output in April.
The BSE benchmark rose 194.79 points or 1.17%, to close at 16,862.80, supported by 25 components. Meanwhile, the NSE benchmark ended above the 5,100 for the first time since May 7, 2012 that moved up 61.80 points or 1.22% to 5,115.90.
After looking at just 0.1% growth in industrial output for April, market experts and bankers expect 50 basis points cut in repo rate or 50-100 basis points cut in cash reserve ratio by RBI in its mid-quarter policy review on June 18.
Even the pressure has been mounted on the RBI for further rate cut after the warning of investment downgrade by rating agency Standard & Poor's and sluggish growth in GDP for fourth quarter of FY12 .
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In the previous policy meet on April 17, the central bank had cut repo rate by 50 basis points to 8% and said there would less room for more cuts going forward. However, this time experts feel the RBI has to take some action to revive slowing economic growth.
Nilesh Shah, MD & CEO, Envision Capital said that the market is poised to rally only if the RBI surprises the street with a 50 basis points (bps) cut as a reduction of 25 bps is already factored in the market. He believes that the upside, however, is capped at 5200-5250 but beyond that only solid earnings could push it higher.
Country's largest lender State Bank of India jumped 2% while its rivals ICICI Bank and HDFC Bank were up 1.6% and 1.85%, respectively.
SBI chairman Pratip Chaudhuri expects the RBI to cut CRR by 100 basis points by June 18 that will release Rs 60,000 crore of liquidity into banking system.
Auto stocks too participated in the rally on rate cut hopes after lowest growth in car sales for May in the last eight months due to high interest rates and petrol prices. Shares of Tata Motors and Maruti Suzuki rallied 3% each while M&M gained 2%. Two-wheeler majors Hero Motocorp and Bajaj Auto were up 0.7% each.
Country's largest engineering and construction company by sales Larsen & Toubro surged 2.5% while state-owned capital goods company BHEL was up 1.4%.
Cigarette major ITC climbed 1.5% and state-owned oil & gas producer ONGC moved up 2%.
India's largest software services exporters TCS and Infosys rose 1% each. Top telecom operator Bharti Airtel too was up 1%.
However, shares of Dr Reddy's Labs and Wipro fell over 1.7%. FMCG major HUL slipped 0.5%.
In the second line shares, aviation, infrastructure, real estate and banks were on buyers' radar.
UCO Bank, Allahabad Bank, Kingfisher Airlines, IVRCL, Jet Airways, GMR Infrastructure, Lanco Infratech, HDIL, Hotel Leela, Pantaloon Retail and SKS Microfinance shot up 3-9%. However, Suzlon Energy tanked 2.5% on downgrade by foreign brokerages.
The BSE Sensex and NSE Nifty rose 1% each in afternoon trade led by consistent buying interest in rate sensitives. Even the Indian rupee recovered more than 20 paise from day's low to trade at 55.84 as against the US dollar, a fall of just 10 paise.
Indian equity benchmarks moved up further led by support from banks, auto, capital goods and metals stocks. TCS, ONGC, Infosys, Bharti Airtel and ITC too were quite supportive.
The BSE Sensex and NSE Nifty extended gains amid volatility in afternoon trade, supported by banks, auto, oil & gas, metals and capital goods stocks. Even the Indian rupee recovered from day's low of 56.05; it depreciated by 17 paise to 55.91 as against the US dollar.
The BSE Sensex and NSE Nifty remained flat despite lower than expected industrial output for April. The reason may be that the Reserve Bank of India may cut repo rate by 50 basis points or cash reserve ratio by 50 basis points in policy meet (that schedule to be announced on June 18), say experts.
The 30-share BSE Sensex and 50-share NSE Nifty stayed marginally lower amid volatility due to fall in rupee. The Indian rupee fell below the 56 level as against the US dollar to 56.05, down 31 paise from previous close.
SENSEX-FALLS-AHEAD-OF-OUTPUT-DATA:Sensex falls ahead of output data
The BSE Sensex and NSE Nifty started off trade on a lower note on Tuesday following global downtrend due to endless Greek and Spain concerns.
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