Sensex surges 500 points on rate cut hopes

Mumbai  :  A benchmark index of the Indian equities markets surged nearly 500 points Wednesday led by strong buying support in interest rate-sensitive banking, realty and auto stocks on expectation of rate-cut after inflation fell to a three-year-plus low.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened in the positive at 19,798.18 points, ended the day at 20212.96 points, up 2.49 percent or 490.67 points from its previous day close at 19,722.29 points.

This is the biggest rally in the market in almost one year. The benchmark Sensex touched a high of 20241.96 points and low of 19,798.18 points in the intra-day.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) rallied 2.52 percent or 151.35 points at 6,146.75 points.

Strong buying support in interest rate sensitive banking, realty, auto and capital goods stocks led the rally in the markets.

India’s headline inflation fell to 4.89 percent in April, the lowest level since November 2009, according to official data released Tuesday.

Inflation has come within the comfort zone of the Reserve Bank of India (RBI) for the first time in almost three-and-a-half year. A sharp drop in inflation has fuelled hopes that the central bank would lower interest rates early.

The BSE realty index rallied 4.04 percent. Banking index rose 3.95 percent; capital goods index 3 percent and auto index 2.29 percent.

HDFC jumped 4.70 percent at Rs.909.80. SBI, up 4.07 percent at Rs.2,384.50; L&T, up 3.85 percent at Rs.1580.35; ICICI Bank, up 3.80 percent at Rs.1191.65; HDFC Bank, up 3.72 percent at Rs.714.80 and Mahindra & Mahindra, up 3.60 percent at Rs.984.65 were among the major Sensex gainers in percentage term.

Only one of the 30 Sensex scrips closed in the red. Wipro fell 0.53 percent at Rs.346.10.

Photo : AFP