Mumbai: Snapping their three day losing streak, the equity markets soared higher on Tuesday led by gains in IT and private sector banks.
The latest government data showing retail inflation dropping to an 18-month low sparked hopes regarding an interest rate cut by the Reserve Bank of India (RBI) in its forthcoming monetary policy meet.
The Sensex climbed 464.77 points or 1.30 per cent to close the day at 36,318.33 while the Nifty closed the session at 10,886.80, up 149.20 points or 1.39 per cent.
“Tuesday’s rally was undoubtedly the best day so far of the new calendar year,” said Sameet Chavan, technical analyst at Angel Broking. “Firstly, we had a good trended move throughout the day and importantly, we finally broke out from the recent congestion zone in the upward direction. We expect the fresh leg of the rally to commence now. Unless there is some unfavourable development from the global markets, we expect the Nifty to head towards 10,970 and then to test 11,150,”
Meanwhile, the Indian rupee weakened further by another 13 paise and slipped below the crucial 71 level mark against the US dollar on Tuesday amid a rise in global crude oil prices. After hitting an intra-day low of 71.15 a dollar, the rupee finally ended the day at 71.05 per dollar.
According to the provisional data released by the stock exchanges, foreign portfolio investors (FPI) turned net buyers of domestic equities worth Rs 159.60 crore. On the other hand, domestic institutional investors pumped in Rs 417.44 crore. The broader market also participated in the rally with 1549 stocks traded on the Bombay Stock Exchange (BSE) closing higher as compared to 1,022 stocks that declined.
Among the frontline stocks, Yes Bank, Infosys, Vedanta and RIL gained over 3 per cent each while TCS and Bajaj Finance settled with a gain in the range of 2-3 per cent.
