The BSE Sensex and NSE Nifty staged excellent performance on Wednesday, rising over 2.7% on hopes of rate cut by the RBI. Even positive global mood and prime minister’s meeting with key ministries today evening helped markets stay higher.
The NSE benchmark closed at one-month high. The index hit an intraday high of 5,010.45, before closing up 133.80 points or 2.75% at 4,997.10.
Meanwhile, the BSE benchmark gained as much as 474 points intraday, before ending at 16,454.30, up 433.66 points or 2.71% led by broadbased buying.
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Market experts feel the Reserve Bank of India may go for maximum 50 basis points repo rate cut instead of 25 bps in its policy meet that schedule to be announced on June 18.
According to SP Tulsian of sptulsian.com, this time it is not expected to be a minor 25 bps cut, probably the RBI will courageous to go for a 50 basis point cut. He feels that is seem to be a big relief for the infra stocks.
Another major factor in today’s trade was Prime Minister Manmohan Singh’s meeting with all key ministries (that will be held today evening) to review the status of infrastructure sector with an aim of pushing the slowing growth.
Globally all eyes are European Central Bank’s meet that will be at 5:15 hours IST. Experts don’t expect rate cut, but they want some indication from the bank for revival in eurozone economic growth.
Tim Condon of ING Financial Markets said, “We are looking for the ECB to remain on hold today. Eventually they will cut rates but that it is too soon today.”
“More guidance from them will be something that investors will be scrutinizing,” he added.
France’s CAC rose 2% while Germany’s DAX was up 1.7% and Britain’s FTSE went up 1.4%. TheDow Jones futures gained 100 points.
Back home, the BSE Auto, Capital Goods, Power, Bank, FMCG and Metal indices rallied 3-4%. Realty, Oil & Gas, IT and Healthcare gained 1-2.65%.
Country’s largest lender State Bank of India surged 3.8% while its rivals HDFC Bank and ICICI Bank were up 3.5% and 2%, respectively.
Engineering and construction major by sales Larsen & Toubro shot up 4.77% and top power generation company NTPC rose 3.8%.
India’s largest commercial vehicle maker Tata Motors topped the buying list, rising 5.7%. M&M, Hero Motocorp, Bajaj Auto and Maruti gained 3-4%.
Index heavyweights Reliance Industries, TCS, Bharti Airtel and ONGC gained 1.7-3%.
Among metals stocks, Jindal Steel, Sterlite Industries, Tata Steel and Hindalco were up 3-4%. FMCG majors ITC and HUL surged 3-4%.
The market breadth remained strong; about four shares advanced for every share declining on the National Stock Exchange. The BSE Midcap Index rose 1.8% and Smallcap Index was up 1.5%.
(curtsey : money control)
Rupesh Yatesh Dalal
Head Research Department