Sensex up 208 points as lower core inflation fuels rate cut hopes
Mumbai: Snapping a three-day fall, the Sensex on Thursday jumped by nearly 208 points on heavy buying in realty, banking and capital goods shares as core inflation in February fell below 4 percent mark for the first time in nearly 3 years fuelling hopes of rate cut by RBI on March 19.
The Bombay Stock Exchange 30-share barometer, which was down by 183 points at 19,179.33 in morning deals, bounced back and was up by over 425 points to touch a high of 19,604.70 from the day's low after inflation data was released.
The index finally ended higher by 207.89 points or 1.07 percent at 19,570.44. In last three days, Sensex had slumped by 320.68 points or 1.63 percent.
Though WPI inflation rose marginally to 6.84 percent in February driven by costlier food items and petrol, but investors chose to focus on the core inflation number triggering a wave of buying, said traders.
On similar lines, the broad-based National Stock Exchange index Nifty regained 5,900 level by rising 57.75 points, or 0.99 percent to end at 5,908.95.
"While the headline inflation print came higher than expectations at 6.84 percent, the continued moderation in core inflation kept the market expectation alive that RBI would cut the repo rate by 0.25 percent coming Tuesday," said Amar Ambani, Head of Research, India Infoline Limited.
In 30-share Sensex, 24 stocks led by SBI (3.51 percent), Maruti (3.43 percent), ICICI Bank (2.29 percent) and HDFC Bank (2.28 percent) and L&T (1.92 percent) ended in positive territory. Others like RIL, L&T, TCS, HUL, Infosys and Tata Power also closed up.
While 1,420 stocks rose and 1,446 counters fell in overall BSE platform, investor wealth rose by Rs 50,000 crore to Rs 66.94 lakh crore.
Besides, brokers said strong US retail sales data, a higher opening in the European markets and a mixed trend in the Asian region, further supported the domestic market.
A CRISIL report said: "...Core inflation fell below the 4.0 percent mark for the first time in past 35 months, strengthening the case for a repo rate cut by the RBI."
Globally, Asian stocks finished mixed with upward bias. Key indices from China, Hong Kong, Japan and South Korea closed higher while from Singapore and Taiwan finished lower.
However, European markets were trading higher in the early deals as the region's policy makers begin a two-day summit in Brussels. The CAC was up by 0.63 percent, the DAX by 0.76 percent and the FTSE by 0.23 percent.
Turning to the local market, 24 scrips out of the 30- share Sensex pack finished higher while six scrips declined.
Major gainers were SBI (3.51 percent), Maruti Suzuki (3.43 percent), Tata Power (2.86 percent), ICICI Bank (2.29 percent), HDFC Bank (2.28 percent), HUL (2.04 percent), Reliance Ind (1.99 percent), L&T (1.92 percent), Tata Steel (1.46 percent), TCS (1.15 percent), ONGC (1.06 percent) and BHEL (0.89 percent).
However, Gail India fell by 2.09 percent and Bajaj Auto by 2.05 percent.
Among the sectoral indices, the S&P BSE-Realty rose by 2.18 percent, followed by S&P Bankex (2.08 percent), S&P BSE-CG (1.34 percent) and S&P BSE-Oil&Gas (1.26 percent) while S&P BSE-CD fell by 1.45 percent.
However, reflecting continuous selling in small-cap shares, the total market breadth remained marginally negative. The total turnover recovered to Rs 2,266.54 crore from Rs 1,688.31 crore yesterday.
Meanwhile, Foreign Institutional Investors (FIIs) bought shares worth a net Rs 303.83 crore yesterday as per provisional data from the stock exchanges.