Sensex hits 4-month high, Nifty reclaims 8,800 mark on RBI’s rate cut hopes

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Mumbai: The Budget-induced optimism got a leg to stand on as the Sensex on Monday pushed higher for the fourth day by scoring 199 points to close at 28,439—a four-month high—after hopes built up that Reserve Bank of India (RBI) might go in for a rate cut at the Wednesday’s policy meet.

The NSE Nifty retook the crucial 8,800-mark on Monday. At its last policy review in December, RBI in a surprise move had decided to leave rates unchanged, but this time a lower retail inflation and fiscal discipline as shown in the Budget have prompted calls for RBI to remain accommodative.

Global leads aligned as most Asian shares ended higher, tracking weekend gains in the US on better-than-expected jump in US jobs and a move by President Donald Trump to cut back financial regulations, accelerating buying pace by investors.

The 30-share Sensex ended up 198.76 points, or 0.70% at 28,439.28, its highest closing since September 23 last year when it had closed at 28,668.22. Intra-day, it sprang to a high of 28,487.28. The gauge had rallied 584.56 points in the previous three sessions after the presentation of the Budget on 1 February. The NSE Nifty regained control of the 8,800-mark and added 60.10 points, or 0.69%, at 8,801.05 at the close.

On 23 September, the index finished at 8,831.55. “Markets continued to be buoyant on the expectation of rate cut by RBI and positive global cues. We are seeing continuation of rally in the rate sensitive sectors led by reality, banks and FMCG which were also supported by Budget related sops,” said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

Major European indices stayed in the positive zone, too. Data showed that foreign institutional investors bought shares worth Rs353.84 crore last Friday, adding to the level of optimism. The rupee appreciated for the 9th straight day to trade at a fresh 2-1/2 month high of 67.14 (intra-day) against the dollar, keeping the overall mood upbeat.

A good 22 stocks in the 30-share Sensex pack advanced while 8 turned lower. Sun Pharma led the charge by surging 4.20% while ICICI Bank zoomed 3.18%. Adani Ports, Axis Bank, Hero MotoCorp, ITC Ltd, HUL, GAIL, NTPC, Asian Paints, Wipro, RIL, Tata Motors, Maruti Suzuki and L&T supported the ongoing bull run. BSE realty jumped the most (up 1.90%) followed by FMCG (1.28%), healthcare (1.27%) and consumer durables (1.27%).

Broader markets remained in the green too, with the mid-cap index advancing 1.10% and small-cap 0.88%. Realty stocks continued their upward journey, buoyed by the infrastructure status to affordable housing in the Budget 2017-18 to encourage investment in the segment, which offered tax sops to developers to complete unsold inventories.

In the realty space, HDIL soared 7.80%, Godrej Properties surged 3.32%, Prestige Estates Projects 2.83% and DLF 1.32%. Asian shares, led by Hong Kong, closed higher.