Markets rallied for the second straight day with the benchmark CNX Nifty zooming 121 points and closing above the key 5,600 level on NSE today amid rising hopes of rate cuts after a sharp fall in headline inflation.
Notwithstanding strong negative global cues, investors went on a buying spree led by rate sensitive counters along with FMCG, energy, infra and pharma scrips.
Weak inflation figure and unexpected sell-off in global commodities amid fall in international gold and crude prices boosted hopes of contraction in current account deficit and an aggressive rate cut by RBI in its May 3 policy meet.
After a sluggish opening in the backdrop of overnight sell-off in global markets, the Nifty picked up steam in late morning with heavy across-the-board buying. It maintained the strong momentum throughout the day and ended with robust gains.
However, gold loan companies and jewellery stocks continued to witness heavy selling pressure due to sliding gold prices. Technology stocks also cracked.
Most Asian markets saw intense selling for the second day as renewed worries over the outlook of global economic growth dominated investor sentiment. European stocks opened lower after the release of weak German data.
Disappointing gross domestic product (GDP) data from world's second-biggest economy China on Monday sparked a panic sell-off in global commodities and equity markets worldwide.
Gold prices collapsed more than 9 per cent to hit two-year low, suffering its worst sell-off in 30 years while US stocks posted their steepest one-day loss of the year.
The 50-share Nifty hit a high of 5,699.25 and a low of 5,555.85 before ending at 5,688.95, a steep rise of 120.55 points, or 2.16 per cent over the last close.
Among the gainers, IDFC jumped 5.39 per cent, Axis Bank (5.34 per cent), Indusind Bank (4.40 per cent), Maruti (4.16 per cent), ONGC (4 per cent), M&M (3.92 per cent), ACC (3.87 per cent), Dr Reddy's (3.85 per cent), HDFC Bank (3.79 per cent) and RInfra rose 3.53 per cent. Infosys, HCL Tech, Cairn and Lupin were the only losers from the index pack.
Turnover in the cash segment dropped to Rs 10,709.77 crore from Rs 11,435.89 crore yesterday. A total of 5,892.65 lakh shares changed hands in 57,67,427 trades. Market capitalisation stood at Rs 62,70,622 crore.
