Sensex ends 106 pts up ahead of RBI policy; Bankex up 1.8%

The BSE Sensex stayed higher for the fourth consecutive session on Wednesday, tracking positive global cues. Bank stocks spiked in late trade ahead of Reserve Bank of India's monetary policy review tomorrow (March 15).

The 30-share BSE Sensex rose 105.68 points or 0.59%, to close at 17,919.30 after hitting an intraday high of 18,040.69. Meanwhile, the 50-share NSE Nifty went up 34.40 points or 0.63% to 5,463.90.

Listen to the accompanying video for all the market action with Sanotsh Nair and Shishir Asthana..

Bond 8.79% 2021 yield spiked to 8.36 in opening trade today, but that slipped sharply to 8.29 in afternoon trade. Even fall in core inflation (non-food manufacturing) may be another indication for rate cut; WPI manufacturing products inflation dropped at 5.75% in February versus 6.49% in January while WPI inflation increased at 6.95% from 6.55% during the same period.

Majority of experts feel RBI would not go ahead with rate cut. Nitin Jain, MD & Co-Head, Fixed Income, Nomura India believes the components of today’s inflation actually provide a larger opportunity for RBI to cut rates tomorrow. He, however, said the case can be made either way. According to him, if it happens, then quantum will certainly be 25 basis points.

The BSE Bankex gained 1.8% as shares of ICICI Bank, country's largest private sector lender rose 2.6% while rival SBI was up 1% and HDFC Bank up 0.4%. PNB shot up 5%.

Overall the Railway Budget 2012-13 became a non-event for the market. Railway Minister presented his first Rail Budget and put more focus on safety standards and modernisation of railway, though he hiked fares by 9-16%. He insisted that the railways should get 10% of total govt's infrastructure funds, but the company related to the railway is more worried about implementation of these projects announced today.

Kalindee Rail, Texmaco, Kernex Microsystems, Stone India, Titagarh Wagons and Simplex Casting were down 4-6.5% while Zicom gained 2.5%.

The BSE Capital Goods Index moved up 1.6%; engineering and construction major Larsen & Toubro climbed 2.5% and BHEL was up 0.8%.

Shares of ITC, Tata Motors, ONGC, NTPC, Coal India, Hindalco and M&M were up 1.6-2.6%.

However, TCS, India's largest software services exporter plunged 3.56% while rival Wipro lost 1.4% as the company sold some shares via auction today. Wipro has received bids for 2.47 crore equity shares as against offer for sale of 3.5 crore shares, which meant the issue was undersubscribed. The floor price was fixed at Rs 418 a share while today's closing price was at Rs 425.40.

Index heavyweight and oil & gas producer Reliance Industries dropped 0.5% and housing finance company HDFC too fell 0.5%.

The market breadth was in favour of declines; about 1393 shares advanced while 1507 shares declined on the BSE.

Global markets gained after optimistic statement by Federal Reserve yesterday. European markets were up 0.5-1% while the Dow Futures rose 32 points.