Belligerent Sensex surpasses mount 32,000: Equity markets off to a flying start as call for rate cut buoy sentiment

Domestic equity markets put up a strong performance in early trade Thursday, and the benchmark Sensex hit a new historic high breaching the 32,000-mark, as overnight rally in US markets and the follow up gains in other key Asian indices boosted local market sentiment, said dealers. Adding to the optimism, stock market participants believe lending rate cut could be on the cards in the next month’s monetary policy after the industrial growth number eased further in May. According to the data, the country’s factory output growth slowed to 1.7 percent in May from 2.79 percent in April. In view of falling industrial output, Corporate India has called for a reduction in key lending rates in order to boost growth. Further, annual retail inflation eased in June to its slowest pace in more than five year with the consumer price index rising to 1.54 percent last month as against the Reuters poll forecast of 2.18 percent. “We do expect a rate cut of 25 basis points in the August policy,” said Anjali Verma, an economist with Phillip Capital India. [caption id=“attachment_2411792” align=“alignleft” width=“380”]  Reuters[/caption] Maintaining the upward bias, the benchmark Sensex opened on a firm note and immediately hit the crucial 32,000 level to touch a fresh all-time high of 32,046.57, up 242 points. The Sensex continues to hold above the mount 32,000 level, and is up 233 points, or 0.7 percent from previous close at 32,038.18. The broader Nifty, too, advanced sharply to touch a fresh high of 9,885.65 and is now up 66.20 points, or 0.7 percent at 9,882.30. Frontline banking stocks were in the limelight with ICICI Bank gaining 1.5 percent while Axis Bank rising 1.2 percent. Cigarette-to-food company ITC was the biggest gainer in the Sensex space, jumping 1.8 percent. Among other gainers, shares of Bharti Airtel, NTPC, Tata Steel, Power Grip Corp, HeroMoto Corp and Dr Reddy’s were up around a percent each. Market breadth was positive with 1,407 stocks advancing against 789 declines on BSE. In the overnight trades, Dow Jones ended 123 points higher, while tech-heavy Nasdaq rose 68 points. Key Asian gauges like Japan’s Nikkei gained 16 points while China’s Hang Seng surged 280 points tracking firm global cues.