Sensex up on rate cut hopes, Infosys down ahead of Q4
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The BSE Sensex traded near the day's high overlooking the slowdown in factory output in February. At 2 pm, the Sensex traded 174 points or 1% higher at 17,373 while the broader Nifty index advanced 58 points to 5,285.
Factory output, as measured by the index of industrial production, rose 4.1% in February, which was below expectations of over 6% growth. Falling industrial output might spur the Reserve Bank to cut rates on April 17, analysts said.
"We are not seeing a crash down from current levels and this trend line is likely to hold... We many see a saucer-shaped recovery in industrial growth especially with expectations that the RBI may cut rates by 25 basis points on April 17," Indranil Pan, chief economist at Kotak Mahindra Bank told NDTV Profit today.
It was not surprising then that banking stocks (1.9%) led the gains on the BSE today. Other rate sensitive sectors like auto (1.4%) also saw buying interest though realty stocks (0.2%) traded flat.
Metal stocks (1.9%) saw strong rebound today. Capital goods, consumer durables and FMCF stocks also saw 1-2% gains.
On the Nifty index, Axis Bank (3.5%) was the top gainer, followed by Steel maker JSPL (3.2%). Maruti Suzuki, India's biggest car maker rose 3% after it launched its new MPV Ertiga.
Healthcare stocks saw profit booking. Drug makers like Dr Reddy's (-1.8%) and Sun Pharma (-1.7%) saw selling pressure.
Infosys, India's second biggest IT services outsourcer fell 1.2% ahead of reporting Q4 numbers tomorrow. Wipro and TCS also traded with up to 0.5% losses.
Aviation stocks lost momentum after a decision to allow 49% FDI in domestic carriers by foreign airlines was pushed to next week.
The market breadth was positive with 76% stocks rising on the broader BSE 500 index.