BSE Sensex gains on rate cut expectations

MUMBAI Thu Apr 12, 2012 6:26pm IST

People walk pass the Bombay Stock Exchange (BSE) building displaying India's benchmark share index on its facade, in Mumbai July 31, 2009. REUTERS/Punit Paranjpe/Files

People walk pass the Bombay Stock Exchange (BSE) building displaying India's benchmark share index on its facade, in Mumbai July 31, 2009.

Credit: Reuters/Punit Paranjpe/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - The BSE Sensex rose on Thursday, after weaker-than-expected growth in industrial output data sparked expectations for an interest rate cut next week, boosting lenders such as ICICI.

India's industrial production grew at a slower-than-expected 4.1 percent pace in February from a year earlier, raising expectations the Reserve Bank of India will cut the repo rate at its policy meeting on Tuesday.

Though banks would benefit more directly from a cut in the cash reserve ratio, lowering India's main lending rate could improve growth prospects, helping a sector clamouring for relief either in liquidity or in bolstering the economy, analysts said.

"Market expects that RBI may cut interest rate on 17th April which will be boost the industry growth and investment," said Rikesh Parikh, vice president of equities at Motilal Oswal Securities.

The 30-share Sensex rose 0.77 percent to close at 17,332.62 points, while the broader Nifty closed 0.96 percent up at 5,276.85 points.

Lenders were among the leading gainers. ICICI Bank (ICBK.NS) rose 1.69 percent while State Bank of India (SBI.NS) gained 3.2 percent.

Bharat Heavy Electricals (BHEL) (BHEL.NS) rose 2.7 percent after the capital goods sub-index in the output data grew 10.6 percent in February from a year earlier, sharply recovering from an annualised fall of 1.7 percent in January.

Shares in India's largest car maker Maruti Suzuki (MRTI.NS) rose 3.14 percent on hopes for improved sales from its newly-launched vehicle Ertiga, which analysts said was priced low enough to make it competitive in the utility vehicle segment.

However, among decliners, India's second-largest software exporter Infosys (INFY.NS) fell 1.92 percent ahead of its quarterly earnings scheduled for Friday as investors fear weaker results for the sector.

Rivals Tata Consultancy Services (TCS.NS) lost 0.6 percent, while Wipro (WIPR.NS) declined 1.5 percent.

(Editing by Rafael Nam)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Barack Obama in India

Reuters Showcase

Coal Mining

Coal Mining

India to open coal to commercial mining firms soon, minister says  Full Article 

RBI Loan Rules

RBI Loan Rules

RBI relaxes overseas loan recast rules   Full Article 

E-commerce Firms

E-commerce Firms

Amazon, e-commerce rivals fuel commercial property boom in India  Full Article 

Growth Forecasts

Growth Forecasts

Indian economic growth forecasts pegged back, despite rate cuts: Reuters Poll.  Full Article 

Uber is Back

Uber is Back

Uber back in Delhi; govt says must await approval.  Full Article 

Markets at Record

Markets at Record

Sensex rises to record after ECB stimulus programme.  Full Article 

Pharma Sector

Pharma Sector

Ipca Labs hit by FDA ban on plant for standard violations.  Full Article | Related Story 

Forex Reserves

Forex Reserves

India FX reserves at record high as RBI fortifies defences  Full Article 

QE for Euro Zone

QE for Euro Zone

ECB launches 1 trillion euro rescue plan to revive euro economy.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage