The BSE Sensex surged over 500 points intraday on Wednesday as data showing easing inflation and a government forecast for an above-average monsoon rains sparked hopes for the economy and for more rate cuts by the central bank. Later, the index settled 481.16 points, or 1.91 per cent, up at 25,626.75. Similarly, the Nifty index on the National Stock Exchange soared 141.50 points, or 1.84 per cent, to 7,850.45.
In the 50-share index, Mahindra and Mahindra, Bajaj Auto, ICICI Bank, Maruti Suzuki and BHEL gained 7.38 per cent, 4.97 per cent, 4.96 per cent, 4.72 per cent and 4.56 per cent, respectively. On the other hand, ZEEL, Infosys, HCL Technologies, Adani Ports and Aurobindo Pharma slid 1.12 per cent, 0.57 per cent, 0.46 per cent, 0.26 per cent and 0.08 per cent, respectively.
Nirdosh Gaur, managing director and CEO, Moneypalm, said, “Domestic equity markets on Wednesday opened higher on positive cues from global markets, better than expected CPI numbers and positive IIP reading after a gap of three quarters. Forecast of an above normal monsoon by the Met department after two successive droughts also boosted sentiment and raised hopes for pickup in growth momentum.”
Sectorwise, the BSE Auto index surged the most — 3.59 per cent, the BSE Bankex (2.56 per cent), BSE Metal (2.14 per cent). Rest all other sectoral indics on the Bombay Stock Exchange also ended in green.
Support also came with the International Monetary Fund’s latest World Economic Outlook report, which despite cutting global growth forecast has said that India’s growth is projected to notch up to 7.5 per cent in 2016-17, overtaking China’s GDP by more than 1 per cent, mainly driven by private consumption and increased industrial activity.
Buying in banking stocks too aided sentiments on hopes that credit growth would pick up after data showed a rebound in industrial output in February. FMCG majors ITC and HUL ended higher on hopes that good monsoon this year would boost volume growth going forward.
Stocks related to realty counter too remained on buyers’ radar on hopes that the Reserve Bank of India could ease interest rates further after latest data showed that consumer price inflation eased to a six-month low in March. Metal and Mining stocks also gained after the latest data showed stronger-than-expected growth in China’s exports.
“The retail inflation at 4.83 per cent is now well within RBI’s comfort zone of 5 per cent. If monsoon in coming months is in lines with the prediction, inflation will come down to sub 4 per cent levels and we can expect another round of rate cut by RBI in October 2016,” said Nirdosh.
Jewellery-related remained in action on Wednesday after jewellers in the national capital temporarily called off their 42-day strike, demanding rollback of proposed excise duty on non-silver jewellery, for
12 days after the government’s assurance that there will be no harassment by excise officials. Shree Ganesh and Gitanjali Gems surged 7.95 per cent and 5.01 per cent to Rs 8.01 and Rs 37.30 respectively.
Asian equity markets ended higher on Wednesday, with sentiment bolstered by a weak yen, an overnight rally in oil prices and upbeat Chinese trade data. Chinese and Hong Kong shares ended higher, as upbeat trade figures out of China coming in before Friday’s release of first-quarter GDP data raised hopes that China’s slowdown might not be quite as severe as initially feared. While Chinese exports grew 18.7 per cent year-over-year in March in yuan terms, the fastest pace of growth since February 2015, the contraction in imports slowed to 1.7 per cent, beating expectations by a wide margin after an 8 per cent decline in the previous month. Japanese shares hit a fresh 1-1/2 week high as the yen slid from recent peaks against the dollar and Chinese trade data smoothened growth worries. Markets in South Korea were shut for a public holiday.