Markets snap losing streak as rate cut hopes grow. Nifty, Sensex up 1%.

Higher Markets

The BSE Sensex rose 1.1 per cent on Thursday, ending a three-day losing streak, as interest rate-sensitive stocks such as ICICI Bank rose after lower-than-expected core inflation data raised hopes the Reserve Bank of India (RBI) would ease monetary policy next week.

The benchmark BSE Sensex rose 1.07 percent, or 207.89 points, to 19,570.44, marking its biggest single-day percentage gain since March 8.

The broader Nifty rose 0.99 percent, or 57.75 points, to 5,908.95, closing above the psychologically important 5,900 level.

Rate-sensitive stocks such as State Bank of India gained 3.5 percent while ICICI Bank rose 2.3 percent.

Shares of top private sector lenders ICICI Bank, HDFC Bank and Axis Bank gained, recovering from morning falls sparked by accusations from an independent investigative journalist that the three banks had engaged in widespread money laundering.

All three banks said they would investigate the allegations, while emphasising they complied with all regulations adhered to high conduct standards.

Among auto stocks, Maruti Suzuki India rose 3.2 per cent, while Mahindra and Mahindra ended 0.4 per cent higher, on hopes RBI rate cuts would lower financing costs, boosting sales.

Infosys rose 0.4 percent after it said in a statement that the company had been selected by BMW Group as worldwide partner for application basis infrastructure management services for five years.

Reliance Industries gained 1.8 percent, while Oil and Natural Gas Corp rose 1 percent on expectations of additional inflows as both stocks could see an increase in their weightage in FTSE indexes after a re-balancing announced last week by the index provider.

However, among stocks that fell, Titan Industries ended 3 per cent lower on Thursday on concerns over stress on its working capital cycle and interest costs, dealers said.

Concerns over a proposal by the RBI of linking the gold leasing rate to the base rate could potentially reduce earnings by up to 10 percent, HSBC Securities said in a note.

National Aluminium Co Ltd (NALCO) fell 4.3 per cent a day ahead of the government’s planned stake sale on Friday.

Copyright Thomson Reuters 2013

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