Markets gain on rate cut hopes

Key share indices ended marginally higher on Monday, amid a rangebound trading session, led by rate sensitive shares such as auto and banks on hopes that the central bank would cut interest rates at its fiscal year's monetary policy review tomorrow.

The 30-share Sensex ended at 17,151 up 56 points and the 50-share Nifty ended at 5,226 up 19 points. The Sensex and the Nifty reached an intra-day high of 17,166 levels and 5,231 mark, respectively.

India's wholesale price index (WPI) rose a faster-than-expected 6.89% in March from a year earlier, mainly driven by higher food prices, government data showed on Monday. The annual reading for January was revised up to 6.89% from 6.55%, the government said in the release.

Inflation, as measured by the Wholesale Price Index (WPI), was 6.95% in February. In March last year, it was 9.68%. As per the official data released today, inflation in food items was 9.94% in March, as against 6.07% in February.

On the global front, Japan's Nikkei share average fell 1.7% on Monday as investors cut their exposure to risky assets in response to fresh concerns over the euro zone debt crisis after Spanish bond yields soared.

Exporters dependent on the European market were heavily sold, with TDK Corp, Konica Minolta Holdings Inc and Nikon Corp shedding between 2.2 and 3.9% as the euro slipped below 105 yen.

European markets are trading higher with CAC, DAX and FTSE gaining between 0.1-0.5%.

Back home, BSE Technology index slumped by almost 0.5%. Infosys ended 1% lower, extending its record single day fall of around 13% on Friday, after the IT bellwether reported disappointing fourth quarter earnings and offered lower dollar revenue and earning per share (EPS) guidance for FY13.

Telecom major Bharti Airtel was the top Sensex loser, down nearly 2%. 

Among Oil & Gas pack, Reliance Inds and ONGC declined marginally.

On the gaining side, sectors like Auto, FMCG, Capital Goods, Realty and Banks gained by over 1% each.

Rate sensitive stocks gained on hopes that the Reserve Bank of India (RBI) will cut the key rates at its monetary policy review.

From the FMCG segment, ITC gained by over 2%. 

In the capital goods segment, L&T and BHEL were up between 1-2% each after February IIP data released on Thursday showed that the capital goods segment showed a growth of 10%.

Tata Motors was the top Sensex gainer, up by almost 4% after the company said its global sales jumped 26% in March to 139,655 vehicles on back of robust demand for Jaguar and Land Rover (JLR) vehicles.

Other gainers included SBI, Maruti Suzuki, Tata Steel, ICICI Bank, DLF, Jindal Steel and Bajaj Auto.

The broader markets outperformed the benchmark indices, with the BSE Midcap and the Smallcap indices gaining between 0.6-0.8%. 

Pfizer rallied 5%, extending its over 4% gain in past two trading sessions on the Bombay Stock Exchange (BSE).

Gravita India surged 18% to Rs 807 on back of huge volumes.

The overall market breadth in BSE remained positive with 1,545 stocks advancing and 1,221 stocks declining.