Sensex gains ahead of RBI policy; TCS, Kingfisher rebound

The BSE Sensex surged over 70 points or 0.4 per cent ahead of the Reserve Bank of India's policy announcement on Tuesday. The broader Nifty traded with over 20 points gain while the rupee traded higher at 54.76 to the dollar.

The central bank is widely expected to hold off on easing interest rates but may signal a more dovish stance. Goldman Sachs expects the RBI to cut interest rate by 25 basis points citing softer inflation data, but the contrarian view is not widely shared by other analysts. The probability of a CRR cut is much higher, analysts said.

Rate sensitive stocks - banks, realty and auto - were all up, along with the broader markets. On the Nifty, 41 of the 50 stocks traded higher.

Iron ore miner Sesa Goa was the top gainer, up 1.6 per cent, followed by state-run power equipment maker BHEL, up 1.3 per cent.

TCS shares rebounded after the IT major's management said there was no change to scenario versus earlier plan on full year, unlike Infosys which sounded pessimistic about FY13 guidance.

Reliance Infra, drug maker Lupin, car maker Maruti and software services exporter Infosys were some of the stocks trading lower.

Kingfisher Airlines shares rebounded on reports that the promoters are likely to infuse Rs 425 crore to resume operations in the grounded carrier. Jet Airways shares gained 2.5 per cent on hopes of Etihad investment.

At 09.25 a.m., the Sensex traded 62 points higher at 19,307 while the Nifty traded 17 points higher at 5,875.

Global markets:

Asian stock markets were mostly higher, boosted by signs China's recovery is gaining traction and hopes for a new stimulus in Japan. Tokyo's Nikkei 225 added 1 percent, adding to the previous session's 0.9 percent gain.

Sentiment in China was supported by signs the world's second-largest economy is emerging from its deepest slump since the 2008 global crisis. Optimism was boosted by last weekend's pledge by new Communist Party leaders to support a recovery with more spending and easy credit if needed. They also promised reforms aimed at expanding private business.

 

(With inputs from agencies)