The Indian equities continued their surge to hit two-year highs on investors’ optimism about the domestic economy as better-than-expected corporate earnings trickled in.
The Sensex galloped past 20,000 twice during the session and closed at 19986.82, up 0.4 percent, the highest close since 6 January, 2011, according to Reuters report. Intra-day, it hit a high of 20,036.
Meanwhile, Nifty closed at 6056.60, up 0.54 percent.
With December inflation hitting a three-year low, hopes of a rate action by the RBI on 29 January has soared.
In an interview with CNBC TV18, Sanjay Mathur of RBS said that he is confident of RBI cutting rates. ” I think what they will do is they will go with a 50 bps cut and then they would do another 50 basis points, but on a staggered basis, with 25 bps in the first phase and another 25 bps later depending on how CPI and the external situation pans out,” he said.
The Planning Commission yesterday also made a case for lowering of interest rates for attracting investments and reversing the declining trend of economic growth. “…lowering interest rates and reduction in fiscal deficit is important for the stabilising and growth of the economy,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said
Stocks in news
Telecom shares including Bharti Airtel (4.81 percent) and Idea Cellular (8.27 percent) closed up on Tuesday on speculation the Indian mobile carriers may raise voice call tariffs, several traders said, Reuters reported. In a separate development, Bharti Airtel also announced change in senior management where its CEO Sanjay Kapoor quit and Gopal Vittal is set to take over.
Spicejet closed 4 percent up after Times of India reported that the company is in talks with Etihad Airlines for a stake sale.
Yes Bank closed 4 percent up after reports that the bank is in talks to buy the local retail and commercial banking operations of Royal Bank of Scotland Group a source with direct knowledge of the matter said on Tuesday.
ITC closed up 2 percent, gaining for a second day on value buying after falling 10.6 percent since index compiler FTSE cut its free-float weighting on the stock in mid-December, as of Friday’s close, dealers say.