Optimism about economic growth on the back of recent data that showed a marked increase in industrial output in March, and notable decline in wholesale price and retail inflation lifted sentiment on the Indian bourses and drove key indices Sensex and the Nifty50 to record intra-day and closing highs on Tuesday.
Global cues were mixed with Asian markets mostly closing higher and major European markets opening on a weak note.
Investors bet on interest rate cut following a decline in consumer price inflation in April. Some good quarterly earnings reports from India Inc and the recent report from the weather office that forecast a normal southwest monsoon too aided sentiment.
The BSE benchmark Sensex, which zoomed to 30,591.55, ended at 30,582.60, gaining 260.48 points or 0.86%. The Nifty50 of the National Stock Exchange ended up 66.85 points or 0.71% at 9512.25, slightly off a new high of 9517.20.
In the forex market, the rupee was trading at 64.09 against the U.S. dollar around late afternoon, down slightly from its previous close of 64.12.
Telecom, automobile and realty stocks were among the prominent gainers. FMCG, information technology, consumer durables and bank stocks too found good support. Capital goods, healthcare, oil, metal and power stocks turned in a mixed performance.
Activity was stock specific in midcap and smallcap segments.The day saw several large, midcap and smallcap stocks hitting new all-time highs. The market breadth was almost even.
Hero Motocorp, up 3.1%, was the top gainer in the Sensex. Among other automobile stocks in the Sensex, Maruti Suzuki gained 2.1%, Tata Motors gained 1.3% and Bajaj Auto added 1.1%, while Mahindra & Mahindra ended lower by about 1%. Among other automobile stocks, TVS Motor gained 1.6%, Eicher Motors ended 1.3% up and Ashok Leyland gained 0.5%.
Telecom stock Bharti Airtel gained 3%. Idea Cellular ended 2.3% up and Bharti Infratel gained 1.6%, while Reliance Communications edged up marginally. Tata Communications and MTNL ended weak.
Among IT majors, Tata Consultancy Services gained 2.6%, Oracle Financial Services ended 3.% up, Wipro added 1.85% and Infosys gained about 0.5%. KPIT ended more than 1% up, while Tech Mahindra, HCL Technologies, Tata Elxsi and MindTree edged up marginally.
Realty stocks Unitech (11.1%), Indiabulls Real Estate (2.6%), Sobha (1.3%), DLF (1.1%), Omaxe (0.85%) and Prestige (0.7%) ended with sharp to moderate gains. HDIL, Phoenix, Oberoi Realty and Godrej Properties declined.
Among bank stocks, Punjab National Bank gained more than 4.5% on notable jump in net profit and decline in bad loans. Bank of Baroda advanced 2.6% and State Bank of India ended 2.2% up. IndusInd Bank, Yes Bank, Axis Bank and ICICI Bank edged up marginally. HDFC Bank ended little changed, while Federal Bank and Kotak Mahindra Bank ended sharply lower.
In the healthcare space, Dr Reddy's Laboratories ended 1.6% up. Lupin gained about 0.5% and Aurobindo Pharma ended slightly up. Piramal Enterprises, Sun Pharmaceutical Industries, Cipla, Divi's Laboratories and Glenmark Pharmaceuticals ended weak.
The government's recent data showed that consumer price inflation fell to 2.99% in April, well below the central bank’s comfort zone. This has raised hopes that the central bank will reducte interest rates while coming out with its monetary policy review early next month.
