Sensex snaps 5-day fall; gains 221 pts as inflation recedes
Snapping five-day losing streak, the BSE Sensex on tuesday surged by 221 points on fresh buying in rate-sensitive banking
Mumbai: Snapping five-day losing streak, the BSE Sensex on tuesday surged by 221 points on fresh buying in rate-sensitive banking, realty and capital goods stocks after retail inflation eased to 30-month low of 7.31 per cent.
The 30-share BSE barometer closed at 25,228.65 points, up by 221.67 points, or 0.89 per cent over last close. In the previous five sessions, the index lost nearly 1,100 points.
The small-cap and mid-cap indices of BSE also firmed up to 2 per cent on good demand from retail investors and outperformed the benchmark Sensex.
The 50-share Nifty of NSE also rose by 72.50 points or 0.97 per cent to 7,526.65.
Brokers said softening of inflation sparked off hope that the Reserve Bank will cut interest rate at its policy review next month. Stocks of consumer durable, banking, capital goods, realty, power and refinery gained.
Retail inflation in June touched its lowest mark at 7.31 per cent since January 2012 and the wholesale price-based index slid to four-month low of 5.43 per cent mainly because of easing vegetables prices.
“Most of the sectors recovered from lower levels due to bargain buying after a decent correction seen in last week. Better IIP data and easing inflation has boosted market sentiment, as they expect policy rates to soften in coming months,” said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio Ltd.
Rate-sensitive sectors like banking, auto and realty were seeing buying interest, Saraswat added.
Among 30-Sensex scrips, 19 ended higher.
SBI was the biggest gainer among Sensex stocks rising by 4.47 per cent. Bhel rose by 4.31 per cent, ICICI Bank by 3.34 per cent and Tata Steel by 2.91 pct.
Axis Bank rose by 2.78 pct, M&M by 2.59 per cent, ONGC by 2.31 per cent, Larsen & Toubro by 2.27 per cent and RIL by 1.16 per cent. Coal India, Bajaj Auto, Tata Motors and Gail India also posted gains.
Dr Reddy’s was the major loser among index stocks with losses of 1.99 per cent.