Bank Nifty at 30 month high on RBI optimism; rate sensitives lead gains in noon deals

Markets continued its upward momentum with the BSE and NSE benchmark indices at a 28 month high, up 2.3% each, while the Bank Nifty surged to a 30 month high in the noon deals. At 1425 hrs, the Sensex was up 470 points or at 20,192 and the Nifty gained 146 points to trade at 6,141.

However, the broader markets underperformed the Sensex, with both the mid and smallcap indices gaining 1% each.

Investor’s risk-appetite surged after the Reserve Bank of India’s governor said it will take a note of easing inflation while formulating the monetary policy.

Wholesale Price Index (WPI) inflation for April 2013 moderated for the third straight month to 4.89%, below the comfort zone of the RBI, bolstering hopes of an interest rate cut by the central bank. RBI’s comfort level for inflation is between 4% and 5%.

Meanwhile in global markets, Europe was mixed with CAC and FTSE down 0.06% and 0.1% respectively while DAX was up 0.07%.

In Asia, Japan’s Nikkei average rose 2.3%, breaking above 15,000 for the first time since January 2008. the other major gainers were Shanghai Composite, Hang Seng and Taiwan Weighted gaining 0.3-0.8%

All the sectoral indices gained over 1% except IT index which was up 0.3%.

Rate sensitives like Realty, Bankex and Auto indices surged 2.6-4%. Capital Goods, PSU, Oil & Gas, Metal, Power and Health Care indices gained between 1.6-2.7%. FMCG and Consumer Durables indices were up 1-1.2%.

For more visit: Business Standard

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