RBI rate cut booster takes Sensex past 26,000; rate sensitives buoy markets

As a wave of bearish sentiment continue to prevail across the European and several other Asian markets, Indian shares, however, shrugged off the early resentment and staged a smart bounce-back as Sensex surged nearly 450 points in an RBI-induced rate-cut booster. Leading the upsurge, a strong bout of short-covering, mainly, in interest rate sensitives such as banking, auto and realty shares propelled the Sensex past 26,000-mark to a high of 26,054.37, up 437 points. The revival, however, came not before the index had come under severe hammering in the first half amid weak overseas cues that pulled it down to a low of 25,287.33, down 330 points. [caption id=“attachment_2449186” align=“alignleft” width=“380”] Reuters[/caption] In effect, the Sensex gyrated 767 points so far amid heightened volatility. At 2.40 pm, the 30-share BSE S&P Sensex was at 26,000.89, up 384.05 points, or 1.9 percent. Similarly, the broader 50-stock CNX Nifty was at 7,910.90, up 115.20 points, or 1.5 percent. Other Asian indices such as Japan’s Nikkei ended 2.8 percent lower, while key Chinese gauges such as Hang Seng shed 3.4 percent and Shanghai Composite fell 1.8 percent respectively. Pessimism also spread to European counterparts, as key indices were down over 2 percent each weighed down by worsening global economic growth prospects. Market breadth snapped early weakness with 1,320 stocks advancing against 1,122 stocks declining on BSE. Leading the recovery, Sensex constituents such as HDFC shot up 4.1 percent to Rs 1,221.40, Maruti rose 4 percent to Rs 4,715, M&M jumped 3.6 percent to Rs 1,265.05, Tata Motors moved up 2.4 percent to Rs 292, BHEL gained 2.3 percent to Rs 199.50 and HDFC Bank was up 2.3 percent at Rs 1,070.35. Other gainers such as SBI, L&T, Infosys, ITC, Reliance Industries and ICICI Bank were up over 1-2 percent each.