Expectations of a rate cut by the Reserve Bank of India and cheaper oil imports from Iran cheered investor sentiments which led a barometer index of the Indian equity markets to gain more than 265 points on Wednesday.
The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed the day's trade up by more than 265 points or 0.95 percent.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also made healthy gains during the day's trade. It closed 70 points or 0.82 percent up at 8,523.80 points.
The S&P BSE Sensex, which opened at 28,022.14 points, closed at 28,198.29 points, up 265.39 points or 0.95 percent from the previous day's close at 27,932.90 points.
The Sensex touched a high of 28,218.37 points and a low of 27,986.48 points in the intra-day trade.
"Today's gains were made on the back of hopes that the Reserve Bank of India (RBI) will cut rates in its upcoming monetary policy review in August," Anand James, co-head, technical research desk, Geojit BNP Paribas, told IANS.
According to James, data points such as the Index of Industrial Production (IIP), Consumer Price Index (CPI) and Wholesale Price Index (WPI) have come in line with estimates.
These data points coupled with a good monsoon have renewed hopes of an RBI rate cut in August.
On July 10, the IIP showed a slowdown to 2.7 percent for May - against 4.1 percent in April.
On Monday, official data on Consumer Price Index (CPI) showed a rise in India's retail inflation to 5.40 percent in June, while the Wholesale Price Index (WPI) continued in the negative territory in June, falling to (-)2.4 percent.
"Another factor for the healthy buying is the Iran nuclear deal. The deal is important for India as it can now import more oil from Iran on cheaper rates and increase its exports of pharmaceutical and other products to that country," James added.
Industry experts foresee oil prices to plunge -- as and when Iran resumes to export oil at the pre-sanction levels. The Middle East state is believed to have around 25-30 million barrels of oil ready for exports.
After Tuesday's massive volatility, Brent index stood at $58.51 and the West Texas Intermediate (WTI) gained to $53 per barrel on Wednesday. The WTI had fallen to $44 per barrel on Tuesday.
Gaurav Jain, director with Hem Securities, said: "Markets closed on strong note as international oil prices will come down with the imminent lifting of sanctions against Iran and India will be one of the beneficiaries."
Jain cited that India is the world's fourth largest oil consumer and also the second biggest buyer of Iranian oil after China.
"Strong rupee and continued buying interest by foreign portfolio investors has lifted the sentiment of the market," James added.
Sector-wise, majority of the 12 sectoral indices of the S&P BSE closed higher, except the consumer durables index.
The S&P BSE automobile index zoomed by 249.27 points, healthcare index augmented by 169.26 points, the information technology (IT) index jumped by 124.51 points, capital goods index was higher by 78.98 points, and technology, entertainment and media (TECK) index rose by 60.23 points.
However, consumer durables index fell by 132.43 points.
The major Sensex gainers during Wednesday's trade were: Maruti Suzuki, up 2.63 percent at Rs.4,155; Tata Motors, up 2.22 percent at Rs.394.30; Wipro, up 2 percent at Rs.577.85; Tata Consultancy Services (TCS), up 1.87 percent at Rs.2,546.25; and Mahindra and Mahindra (M&M), up 1.82 percent at Rs.1,292.
The major Sensex losers were: Tata Steel, down 0.35 percent at Rs.280.70 and State Bank of India (SBI), down 0.11 percent at Rs.268.30.
Among the Asian markets, Japan's Nikkei was up by 0.38 percent, but China's Shanghai Composite Index plunged by 3.02 percent, and Hong Kong's Hang Seng declined by 0.26 percent.
In Europe, the London FTSE 100 index was up by 0.19 percent, the French CAC 40 was higher by 0.18 percent, and Germany's DAX Index gained by 0.15 percent at the closing bell here.
