With hopes of another rate cut by the Reserve Bank of India (RBI), the market, triggered by positive forecast of above normal Monsoon and falling inflation below 5 per cent, remained bullish on Wednesday. As auto and banking stocks among others rallied on hopes of better rural sales, the benchmark BSE Sensex rose by 481.16 points to 25,626.75, which is the highest level in over three months.
The buying spree of domestic investors also boosted the stocks just before two days holidays on Thursday and Friday on account of Ambedkar Jayanti and Ram Navmi, respectively.
After halting two straight weekly slide, the Sensex and Nifty logged hefty rise of 952.91 points or 3.86 per cent and 295.25 points or 3.76 per cent, respectively. Experts, however, are of view that considerable rise in industrial output, fall of inflation and good Monsoon hopes are the factors of market’s upward movement.
“It is raining gains in stocks market. Participants were upbeat after a host of factors namely, forecast of good rains, further easing of consumer price inflation and a rebound in industrial production,” said Shreyash Devalkar Fund Manager - Equities at BNP Paribas Mutual Fund.
With this, the barometer has erased all but 100 points from this year’s losses, which had at one point plummeted to more than 3,000 points. On the day, bullish global cues sparked by strong macroeconomic data from China and surging oil prices after reports of a deal between Russian and Saudi Arabia to cap the production played a part.
Meanwhile, In its World Economic Outlook, the IMF retained 7.5 per cent expansion forecast for India in 2016 and 2017. The Sensex stayed in the positive zone throughout the session and ended higher by 481.16 points or 1.91 per cent at 25,626.75 -- its highest closing since January 1.
Recapturing the 7,800-level, the broader NSE Nifty hit a high of 7,864.80 before settling at 7,850.45, up 141.50 points or 1.84 per cent. In stock specific action, Wipro finished 2.89 per cent up at Rs 584.60 after the company said its board would consider a proposal
for buy-back of equity shares later this month. Stocks of fertiliser, irrigation system and agri machinery manufacturers continued to hog the limelight for a second consecutive day, rising by up to 7 per cent, on forecast of “above-normal” monsoon this year.
From the auto pack, Mahindra & Mahindra jumped 7.40 per cent and VST Tillers Tractors rose 3.14 per cent. Overseas, Asia ended higher after a latest data showed stronger-than-expected growth in China’s exports. The Shanghai Composite settled 1.44 per cent higher, Hong Kong’s Hang Seng rose 3.19 per cent, while Japan’s Nikkei jumped 2.84 per cent after the yen weakened against the dollar.
Europe was also higher with indices in France, Germany and the UK gaining by up to 2.53 per cent. Back home, 28 counters from the 30-share Sensex gained while laggards included Infosys and Adani Ports.
Gainers were M&M (7.40 pc), ICICI Bank (5.40 pc), Bajaj Auto (4.95 pc), BHEl (4.88 pc), Maruti (4.42 pc), Tata Motors (3.40 pc), Hero MotoCorp (3.33 pc), Wipro (2.89 pc), HUl (2.85 pc), Tata Steel (2.61 pc), ITC (2.57 pc), HDFC (2.17 pc), SBI (2.16 pc), RIl (1.75 pc) and Cipla (1.74 pc).
Among sectoral indices, auto rose 3.59 per cent followed by bankex (2.56 pc), finance (2.27 pc), metal (2.14 pc), FMCG (1.86 pc), realty (1.69 pc), power (1.37 pc), industrials (1.35 pc), energy (1.33 pc) and utilities (1.14 pc). The market breadth remained positive as 1,591 stocks ended higher, 1,091 closed lower, while 160 ruled steady. The total turnover rose to Rs2,645.40 crore from Rs2,466.46 crore on Monday.