Mumbai: After plunging over 200 points to its lowest level in five months, the Sensex on Monday recovered to close 23.24 points higher at 15,988.40 riding on rate cut hopes sparked off by the Reserve Bank, rupee's new-found strength and global crude oil falling to a 16-month low. (Agencies)
The late rally was led by Larsen & Toubro, Reliance Industries and banks including SBI.
After losing over 250 points on Friday, the 30-share index opened weak and soon touched 15,748.98 -- the lowest level since January 9. The poor US employment data and concerns over Chinese growth weighed over the Asian stocks with Tokyo market falling to its 28-year low.
But, RBI Deputy Governor Subir Gokarn's comment that below-trend growth and falling crude oil prices offer a window to ease policy stance soothed investor's nerves.
"(For one,) the growth is somewhat lower than expectations and that may have positive, moderating impact on core inflation. Two, oil prices have come off somewhat more than expected. Those are the two factors that suggest more room (for monetary policy)," Gokarn told reporters here.
The trading mood further improved as the rupee strengthened against the dollar touching a one-week high while the Brent crude oil fell below the USD 96 per barrel level.
Buoyed by these factors, the Sensex closed at 15,988.40, up 23.24 points. On similar lines, the 50-share NSE Nifty rose by 6.55 points to 4,848.15, after touching a low of 4,770.35.
Amongst Sensex pack, Larsen & Toubro was the biggest gainer rising 3.43 percent. The recovery was also supported by financial scrips including ICICI Bank, HDFC Bank and SBI that rose over 1 percent each. Other rate-sensitive stocks such as DLF, Tata Motors and Hero MotoCorp rose 1-2 percent.
Energy majors ONGC and Reliance rose 3.2 percent and 1.31 percent respectively, following lower oil prices globally.
According to Sharmila Joshi, Head Equity, Fairwealth Securities, stock markets recovered from their intra-day losses after the RBI Deputy Governor Subir Gokarn said that RBI may cut the policy rates.
In 30-share Sensex, 13 stocks ended higher while 17 scrips closed lower. Across the market, over 1,200 stocks finished with gains while around 1,450 stocks closed lower.
Amongst BSE indices, the capital goods sector index gained the most (2.08 percent) to 8,730.67 points, followed by BSE-Realty index up by 1.35 percent to 1,573.73 points.
The BSE-Oil & Gas index also rose by 1.17 percent to 7,514.18 points while the BSE-Bankex ended 1.10 percent higher at 10,802.52 points.
"Smart recovery was witnessed in almost all the sectoral stocks. Hope of another round of rate cuts from the RBI in the forthcoming meeting led to good bounce back in the market even though the European markets opened on a mixed note," said Shanu Goel, Senior Research Analyst, Bonanza Portfolio.
Mumbai: After plunging over 200 points to its lowest level in five months, the Sensex on Monday recovered to close 23.24 points higher at 15,988.40 riding on rate cut hopes sparked off by the Reserve Bank, rupee's new-found strength and global crude oil falling to a 16-month low.