Snapping a five-day falling streak, the Bombay Stock Exchange benchmark Sensex Tuesday gained 60 points as funds picked up fundamentally strong stocks after less-than-expected rate hike by the Reserve Bank of India.
The 30-share index, which had lost 714 points in the last five trading sessions, bounced back to close 59.90 points up at 17,460.58 points. It touched intra-day high of 17,560.09.
The National Stock Exchange index Nifty rose by 26.45 points to 5,230.10 points.
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The Reserve Bank raised short-term lending and borrowing rates by 25 basis points, which was already factored in by the stock market. Interest-linked realty, banking, auto and power stocks saw buying by funds, brokers said.
State Bank of India and ICICI Bank, the country’s two major lenders, gained 3.26 per cent and 1.49 per cent respectively. DLF, the biggest developer, rose by 3.18 per cent after the rate hike.
Marketmen said they were expecting a 50 basis points hike by RBI to tame inflation.
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With the funds shifting their money in attractive stocks in other segments, the smallcap and midcap sector indices recorded gains up to 1.58 per cent.
Among the 30 index stocks, 19 ended with gains.