Sensex rebounds on rate cut hopes; ICICI Bank up 2%

A rate cut hope from RBI in its upcoming policy review pushed up the Indian equity markets from its three day losing streak.

Sensex closed at 19570.44, up 1.07 percent and the Nifty closed at 5908.95, up 0.99 percent.

India’s headline inflation picked up in February on higher fuel costs but another measure of price pressure cooled, reinforcing expectations that the RBI will deliver a rate cut next week. The wholesale price index (WPI), the main inflation indicator, rose an annual 6.84 percent in February, higher than the 6.54 percent rise estimated by analysts. Wholesale prices rose 6.62 percent in January.

“If inflation remains sticky at 6 percent levels, the room to cut will be limited. We don’t see rates coming off sharply,” said Yuvika Oberoi, economist at Yes Bank, who expects inflation to remain at those levels through the year.

Additionally, Standard & Poor’s repeated its previous stance that it may revise India’s outlook to “stable” from “negative” if the government implements initiatives to reduce structural fiscal deficits, improve investment climate and increase growth prospects.

Stocks in news

Titan Industries shares closed down 3 percent on Thursday on concerns over stress on its working capital cycle and

interest costs, dealers said.

HDFC (0.50 percent), ICICI Bank (2.29 percent) and Axis Bank (0.51 percent) closed up on rate cut hopes even after a sting operation carried out by online magazine Cobrapost across various branches of these banks has revealed that banks are involved in money laundering.

Infosys closed up half a percent after it announced it has been selected by German luxury car maker BMW Group as its

worldwide partner for application basis infrastructure management services.

With inputs from Reuters