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Sensex rebounds over 436 pts on rate cut hopes

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Mumbai;With the Budget out of the way, the focus now shifts to RBI Governor Raghuram Rajan’s monetary policy action to revive investment and growth. PTI file photo

A day after suffering losses following the presentation of the Union Budget, the benchmark Sensex bounced back by over 436 points today, bolstered by renewed hopes of a rate cut by the Reserve Bank amid positive Asian cues.

With the Budget out of the way, the focus now shifts to RBI Governor Raghuram Rajan’s monetary policy action to revive investment and growth.

The 30-share index rebounded by 436.23 points, or 1.89 per cent, to 23,438.23 on heavy buying. The gauge had lost 152.30 in a highly volatile trade yesterday, mainly hit by a proposal for a higher dividend distribution tax on those earning more and a one on raising securities transaction tax on options trading.

Also, the NSE Nifty reclaimed the crucial 7,100-mark by surging 134 points, or 1.91 per cent, to 7,121.05.

All sectoral indices led by FMCG, banking, IT, realty, technology and capital goods traded in the positive territory, rising by up to 3.39 per cent.

While foreign institutional investors took to selling, domestic financial institutions stuck to buying, helping the benchmark indices recover.

Proposals of higher spending in infrastructure and allocation of nearly Rs 36,000 crore for the farm sector and a higher credit target aimed at doubling farmers’ income in five years helped improve sentiment, brokers said.

Hong Kong’s Hang Seng rose by 0.54 per cent while Shanghai Composite jumped 0.40 per cent in early trade. Japan’s Nikkei shed 0.69 per cent. The US Dow Jones Industrial Average ended 0.74 per cent down in yesterday’s trade.

PTI

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