Sensex up 95 points as fall in inflation revives rate cut hopes
The Sensex shrugged off initial hesitancy and climbed to a fresh five-month high of 17,728.20 on Tuesday after gaining nearly 95 points on renewed hopes of rate cut by the Reserve Bank following lower-than-expected fall in July inflation numbers.
The BSE benchmark index opened flat on mixed global cues and touched the day's low of 17,572.34 -- down 61 points over yesterday's close -- amid investors expecting July wholesale price index based inflation would be at 7.3 per cent level.
The government data, however, showed inflation declined to 6.87 per cent. This is the first time the number fell below 7 per cent in over 30 months. Markets rejoiced it with Sensex moving up. It settled the day 94.75 points up at 17,728.20, a level last seen on March 15.
"Inflation numbers came out lower than street estimates. This moderation raises expectation for some monetary easing," said Milan Bavishi, Head Research, Inventure Growth & Securities.
On the global front, Asian stocks settled higher as reportssaid minutes of a meeting by Bank of Japan officials showed policy makers areconsidering steps to boost the economy.
Investors continued to bet global central banks will providestimulus to support growth while economic data from Europe improved marketsentiment in Asian markets. Key indices from China, Hong Kong, Japan,Singapore, South Korea and Taiwan ended higher between 0.30-1.27 per centrange.
European markets were also trading higher in the afternoondeals following better-than-expected German and French gross domestic product(GDP) data. The CAC (France) was up by 0.54 per cent, the DAX (Germany) washigher by 0.81 per cent and the FTSE (UK) was up 0.51 per cent.
Back home, 19 stocks in the 30-share Sensex ended higherwhile 11 scrips finished lower compared to yesterday.
Major gainers from the Sensex were Tata Motors (2.85 pc),Tata Steel (2.53 pc), Jindal Steel (2.47 pc), ICICI bank (2.05 pc), ONGC (1.82pc), Gail India (1.65 pc), Coal India (1.64 pc) and Reliance Industries (1.43pc).
However, Sun Pharma fell by 2.10 per cent, followed by HDFC(1.78 pc) and Sterlite Industries (1.27 pc).
Among the sectoral indices, the BSE-Oil&Gas firmed up by1.27 per cent, the Bankex gained 1.08 per cent, the BSE-Metal inched up 0.83per cent, the BSE-PSU rose 0.71 per cent and the BSE-Auto added 0.71 per cent.
The overall market breadth remained positive as 1,412 stocksfinished with gains while 1,385 settled with losses.
The total turnover firmed up to Rs 2,154.42 crore from Rs1,857.97 crore yesterday.
Foreign Institutional Investors (FIIs) bought shares worthRs 339.76 crores yesterday as per the provisional figures issued by the stockexchanges.
The Bombay Stock Exchange (BSE) and the National StockExchange (NSE) will remain closed tomorrow, August 15, for "IndependenceDay".