Rising for the fourth straight day, the BSE benchmark Sensex on Friday gained around 169 points as the tepid second quarter GDP growth number fuelled hopes of RBI cutting interest rates sooner than expected.
The Sensex, which had regained 19,000 mark level by surging 665 points in last three sessions, spurted further by 168.99 points, or 0.88 per cent to 19,339.90, a level last seen in April, last year.
Brokers said the market remained in cheerful mode despite July-September quarter GDP coming at 5.3 per cent year-on-year as investors bought shares in metal, power, PSUs, banks and consumer durables stocks on hopes of a rate cut in its policy review on December 18 to boost economic expansion.
ADVERTISEMENT
Financial stocks were in limelight as State Bank of India surged by 1.78 per cent, ICICI Bank by 1.56 per cent, HDFC Bank by 0.70 per cent and HDFC Ltd by 2.49 per cent.
In the metal sector, Sterlite Industries surged 3.24 per cent, extending gains in this week’s rally to 13 per cent, while aluminium maker Hindalco Industries advanced by 2.65 per cent. Tata Steel also spurted by 2.24 per cent.
“Another tepid GDP report underlines the marked deterioration in India’s macro-fundamentals in recent years...RBI... may cut interest rates as early as its January policy review. Given tight liquidity, an earlier CRR cut at its December policy review looks likely too,” said Richard Iley, Chief Asia Economist, BNP Paribas.
ADVERTISEMENT
Analysts said the Sensex gained nearly 4.4 per cent this month on heavy inflow of foreign funds on hopes that the government will push through economic reforms.
The 50-share National Stock Exchange index Nifty rose by 54,85 points, or 0.94 per cent to 5,879.85.
The undertone of the market remained bullish after Moody’s and Goldman Sachs came out positive reports recently.
A firming trend in the global markets after data showed the US economy grew more than first expected in the third quarter amid hopes of a deal on averting the fiscal cliff, also supported the uptrend to some extent.