Factors add up for a rate cut, give Sensex a 333-point push

Heightened chances of RBI to reduce policy rate and positive Asian shares gave markets a high as the Sensex gained for the second straight session by soaring 333 points to close at 25,285 -- a nearly 11-week high.

The risk-on buying was in full display as the broader NSE Nifty again vaulted past the 7,700 level.

An accommodative stance of the US Federal Reserve meaning more capital inflows and the government’s decision to slash rates on small savings fuelled expectations that the Reserve Bank will step up and lower rate at its first policy meet of 2016-17 on April 5.

Additionally, a lower retail inflation at 5.18 per cent in February provides more room for RBI to act, said traders.

Sustained foreign fund inflows and a rising rupee brightened mood further, they added.

The 30-share Sensex wrested control of the 25,000-mark again, advanced to a high of 25,327.45 and ended up 332.63 points, or 1.33 per cent, at 25,285.37 -- its highest closing since January 6.

The gauge had gained 275.37 points on Friday as foreign funds continued to pump in money amid a firm global trend after the Fed indicated a slower pace of rate increases in coming days.

The 50-share Nifty too recaptured the 7,700-mark and ended at 7,704.25, up 99.90 points, or 1.31 per cent.

“Overseas stock markets continued to cheer the Federal Reserve’s accommodative policy stance announced last week while Chinese stocks also edged higher after authorities signaled a loosening stance towards margin trading,” said Shreyash Devalkar, Fund Manager, Equities, BNP Paribas MF.

In the 30-share Sensex team, Hindustan Unilever emerged as the top gainer, up 4.05 per cent, followed by SBI 2.93 per cent, Sun Pharma 2.42 per cent and L&T 2.38 per cent.

Jewellery stocks rose sharply by up to 11.11 per cent after jewellers called off their 18-day old strike, who were demanding rollback of proposed excise duty on non-silver jewellery.

On BSE, Shares of Shree Ganesh Jewellery House jumped 11.11 per cent, Gitanjali Gems 7.10 per cent, Tribhovandas Bhimji Zaveri 10.53 per cent, PC Jeweller 3.22 per cent and Titan Company 1.24 per cent.

Capital goods hogged limelight by rising 2.01 per cent, followed by consumer durables (1.80 per cent), realty (1.78 per cent), banking (1.70 per cent) and FMCG (1.65 per cent).

The BSE mid-cap and small-cap closed higher by up to 1.36 per cent. Globally, Asian stocks ruled firm and even Europe saw an upward trend.

In Asia, Hong Kong’s Hang Seng ended 0.06 per cent up while Japanese financial markets remained closed today for a public holiday. Shanghai Composite closed 2.15 per cent higher after policymakers loosened controls on margin lending.

Foreign investors remained net buyers as they bought shares worth Rs 1,712.62 crore on Friday, provisional data showed.