Stocks surge ahead of RBI meet

Rate sensitive sectors such as banking and auto outperform the broader market.

Markets surged higher due to fresh buying on the first day of the June derivative series, increased hope of a rate cut at the RBI credit policy meet on June 2.

Rate sensitive sectors such as banking and auto outperformed the broader market.

The sharp rise in share prices was led by domestic factors, as global cues remained weak. European markets were down led by Greece concerns, while Asian markets closed on a mixed note. The BSE Sensex, which opened on a positive note at 27553.03, quickly slipped into red. But it later bounced back and surged by 321.73 points to close at 27828.44 as investors started fresh long positions in the new series.

“ In spite of poor results Indian markets are holding on due to expectations of a rate cut by the Reserve Bank of India at its June 2 policy meeting.- Rajesh Iyer, Head-Investment Advisory Services, Kotak Wealth Management ”

The NSE Nifty crossed the 8400-mark by rising 114.65 points to 8433.65 after hovering between 8443.90 and 8305.70, intra-day. Bharti Airtel at 5.98 per cent was the best Sensex gainer, followed by M&M, GAIL, Maruti Suzuki and Coal India.

“Stocks have been reacting to results which, on an aggregate basis, are disappointing. In spite of poor results Indian markets are holding on due to expectations of a rate cut by the Reserve Bank of India at its June 2 policy meeting,” said  Rajesh Iyer, Head – Investment Advisory Services & Family Office, Kotak Wealth Management.

“Being the first day of June F&O series, the markets rallied despite weak European market cues. The European markets fell for the second day as the Greece has not reached a debt agreement with creditors,” said Alex Mathews, Head Research of Geojit BNP Paribas Financial Services.

International indices were in correction mode in the last one week. MSCI World Index was marginally down by 0.67 per cent while MSCI Emerging Market Index was down 2.71 per cent. China has corrected sharply on the back of margin curbs by the regulator.

BSE Sensex gains 322 points.

NSE Nifty crosses the 8400-mark.

Bharti Airtel, M&M, GAIL, Maruti Suzuki and Coal India are notable gainers .