Sensex regains 16k on good monsoon, rate cut hopes

Markets on Monday moved from one end of the spectrum to another as they closed in green. After hitting to near five month lows, the BSE Sensex and the Nifty closed up 0.15 percent. The BSE Sensex, the barometer of the Indian economy, closed at 15,988, up 240 points from the day’s low and off 24 points from the day’s high. The S&P CNX Nifty recovered and closed 48 points above the 4,800 level.

Among sectoral indices, consumer durables declined by 2.9 percent followed by FMCG and metals. Capital Goods closed up 2 percent. In the 30-share Sensex pack, 17 ended in red led by Gail, Jindal Steel, Tata Power which fell 2-4 percent. The top gainers were L&T and ONGC.

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[caption id=“attachment_331761” align=“alignleft” width=“380” caption=“The top gainer in the ‘A’ group list was Pantaloon which closed up 6.9 percent”]  [/caption]

The sharp improvement in the market could be attributed to the comments by deputy governor Subir Gokarn that the Reserve Bank of India (RBI) has some room to reduce policy rates following moderate core inflation and soft global oil prices.

Shares of aviation companies rose on reports the aviation ministry has called for abolition of service tax on air tickets and reduction in sales tax on aviation fuel from an average 25% to a uniform 4%.

Shares of fertiliser manufacturers gained ahead of arrival of the monsoon season, which will boost demand for fertilizers. The Indian Meteorological Department states that the weather conditions are “becoming favourable” for the arrival of monsoon rains over the Kerala coast in 48 hours. RCF, National Fertilisers and Zuari Industries closed with handsome gains.

State-owned oil refiners and explorers rose following a slump in crude prices. Oil refiners Hindustan Petroleum Corporation rose 4.4 percent, Bharat Petroleum Corporation added 2.7 percent, while Indian Oil Corporation rose 1.3 percent, Explorers Oil India and ONGC gained 2-3 percent each.

The top gainer in the ‘A’ group list was Pantaloon which closed up 6.9 percent. US based PE firm, Warburg Pincus has agreed to buy 53.67% stake in Future Capital Holding (FCH) from the group in two tranches. According to the deal, Warburg Pincus will buy minimum 40% stake in FCH from the Future Group and will infuse Rs 100 crore. Future Capital closed up 5 percent.

(With inputs from Reuters)