Sensex gains 130 pts ahead of RBI meet

Fag-end buying saved the day for the markets as the benchmark Sensex rose 130 points to 25,399.65 on recovery in European stocks from early losses and hopes that the Reserve Bank of India will cut interest rates on Tuesday.

Sentiment also got a lift after a monthly survey showed that India's manufacturing activity rose to an eight-month high in March driven by strong rise in business orders, leading firms to scale up output.

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"In spite of the sharp increase in risk-reward ratio, the market continues to trade at the upper-end of the trend-line due to a strong expectation of RBI rate cut," said Vinod Nair, head of research at Geojit BNP Paribas.

With inflation under check and the government sticking to the fiscal consolidation path, market expects RBI to cut interest rate by up to 0.50 per cent to propel growth.

Meanwhile, Finance Minister Arun Jaitley also pitched for easier monetary policy, arguing that high interest rates can make the economy sluggish.

The 30-share Sensex advanced to a high of 25,424.15, but profit-booking at improved levels dragged it down to 25,223.49.

However, in the last hour of trading, it staged a strong comeback in line with a recovery in Europe and settled 130.01 points or 0.51 per cent higher at 25,399.65. The gauge had lost 72 points on the first session of the new financial year on Friday.

The NSE Nifty also perked up by 45.75 points or 0.6 per cent to 7,758.80 after moving between 7,764.45 and 7,704.40.

Among automobile stocks, M&M, Tata Motors, Bajaj Auto and Hero MotoCorp witnessed brisk buying activity and climbed 4.29 per cent on the back of strong monthly sales figures.

In stock specific action, Information Technology firm Geometric jumped 19.39 per cent to Rs 234 after HCL Technologies said it signed an agreement to acquire the company’s business.

Shares of Infibeam debuted on the exchanges and ended at Rs 445.70 on BSE, a premium of 3.17 per cent over its issue price of Rs 432.

Mphasis, meanwhile, fell 2.77 per cent to Rs 454.45 as investors saw US-based Blackstone's open offer to buy 26 per cent in the company at a price of Rs 457.50 per share, undervalued.

Globally, European markets recovered from early losses to trade up on positive US index futures and rebound in oil.

The UK's FTSE 100, Germany's DAX and France's CAC gained in the range of 0.54-0.96 per cent.

Earlier, Asia had closed mostly with markets gaining up to 0.27 per cent, while Nikkei fell 0.25 per cent. Besides, Hong Kong and China were closed for a local holiday.

Back home, 18 scrips of the Sensex ended higher and 12, led by ITC, Maruti Suzuki, Axis Bank, Coal India, HDFC and ONGC, finished lower.

Major gainers were, M&M (4.29 per cent), Bharti Airtel (3.76 per cent), Infosys (3.12 per cent), Tata Motors (2.24 per cent), Asian Paints (1.80 per cent), Bajaj Auto (1.35 per cent), Dr Reddy's (1.18 per cent), NTPC (0.85 per cent), Wipro (0.81 per cent), TCS (0.80 per cent), Hero MotoCorp (0.79 per cent) and Tata Steel (0.79 per cent).

Among BSE sectoral and industry indices, telecom rose by 2.77 per cent, tech (2.06 per cent), IT (1.95 per cent), auto (1.16 per cent), utlities (0.82 per cent), power (0.81 per cent) and industrials (0.59 per cent), while realty fell 0.61 per cent, FMCG dropped 0.38 per cent and finance took a hit of 0.08 per cent.

Buying by retail investors picked up in broader markets helping small-cap and mid-cap shares gain 0.52 per cent.

Market breadth remained positive as 1,651 stocks ended higher, 962 closed lower while 133 ruled steady.

Total turnover fell to Rs 2,060.35 crore from Rs 2,144.57 crore on Friday.

Meanwhile, Foreign portfolio investors (FPIs) bought shares worth Rs 214.01 crore on Friday, according to provisional data.