Sensex hits 27-month high, climbs 491 points on rate cut hope

The BSE benchmark Sensex today rose by a massive 491 points to close at 27-month high at 20,213 on buying mainly in banking and interest-senstive stocks, after RBI said low inflation numbers will be taken into account in its next monetary policy on June 17.
With a steepest single-day gain of 490.67 after June 29, last year, the Sensex settled at 20,212.96, its highest level last seen January 2011.
Among major gainers, L&T, Mahindra and Mahindra, Maruti Suzuki, ONGC, Bajaj Auto, Cipla, Bharti Airtel and Dr Reddy's lab advanced on investment buying.
The broad-based National Stock Exchange index Nifty spurted by 151.35 points, or 2.52 per cent, to close at 6,146.75.

The MCX-SX flagship index SX40 closed 245.6 points, or 2.10 per cent, higher at 11,925.14.
"Lower inflation numbers coupled with ample liquidity flow from FIIs are helping the stock market to rise higher and sometimes even surprise," said Nagji K Rita, Chairman & MD at Inventure Growth & Securities.

RBI has said it would take into account falling inflation while deciding on policy initiative in its review next month.
"We certainly will take note of the softening of inflation and the external payments situation in the next mid-quarter policy statement on June 17," RBI Governor D Subbarao said at an event in Frankfurt yesterday.

WPI-based inflation eased to 4.89 per cent in April.
In 30-BSE index components, 29 stocks settled higher and Wipro closed unchanged.
The realty sector index was the star performer by zooming 4.04 per cent to 1,956.35, while capital goods index shot up by 3 per cent to 10,044.13.
The banking sector index spurted by 3.95 per cent to 14,962.99 as HDFC Ltd shot up by 4.70 per cent to Rs 980, SBI by 4.07 per cent to Rs 2,384.50, ICICI Bank by 3.80 per cent to Rs 1,191.65 and HDFC Bank by 3.72 per cent to Rs 714.80.
RIL and Infosys gained 2.65 per cent to Rs 818.80 and by 0.37 per cent to Rs 2,360.20, respectively.