Sensex closes 195 points up on rate cut hopes; SBI, ONGC up 2%

The 30-share BSE Sensex gained as much as 226 points on Tuesday on expectations of further monetary easing by the Reserve Bank of India after a flat industrial output in April.

The BSE benchmark rose 194.79 points or 1.17%, to close at 16,862.80, supported by 25 components. Meanwhile, the NSE benchmark ended above the 5,100 for the first time since May 7, 2012 that moved up 61.80 points or 1.22% to 5,115.90.

After looking at just 0.1% growth in industrial output for April, market experts and bankers expect 50 basis points cut in repo rate or 50-100 basis points cut in cash reserve ratio by RBI in its mid-quarter policy review on June 18.

Even the pressure has been mounted on the RBI for further rate cut after the warning of investment downgrade by rating agency Standard & Poor's and sluggish growth in GDP for fourth quarter of FY12 .

Listen in for all the day's action and the movers & shakers today.

In the previous policy meet on April 17, the central bank had cut repo rate by 50 basis points to 8% and said there would less room for more cuts going forward. However, this time experts feel the RBI has to take some action to revive slowing economic growth.

Nilesh Shah, MD & CEO, Envision Capital said that the market is poised to rally only if the RBI surprises the street with a 50 basis points (bps) cut as a reduction of 25 bps is already factored in the market. He believes that the upside, however, is capped at 5200-5250 but beyond that only solid earnings could push it higher.

Country's largest lender State Bank of India jumped 2% while its rivals ICICI Bank and HDFC Bank were up 1.6% and 1.85%, respectively.

SBI chairman Pratip Chaudhuri expects the RBI to cut CRR by 100 basis points by June 18 that will release Rs 60,000 crore of liquidity into banking system.

Auto stocks too participated in the rally on rate cut hopes after lowest growth in car sales for May in the last eight months due to high interest rates and petrol prices.

Shares of Tata Motors and Maruti Suzuki rallied 3% each while M&M gained 2%. Two-wheeler majors Hero Motocorp and Bajaj Auto were up 0.7% each.

Country's largest engineering and construction company by sales Larsen & Toubro surged 2.5% while state-owned capital goods company BHEL was up 1.4%.

Cigarette major ITC climbed 1.5% and state-owned oil & gas producer ONGC moved up 2%.

India's largest software services exporters TCS and Infosys rose 1% each. Top telecom operator Bharti Airtel too was up 1%.

However, shares of Dr Reddy's Labs and Wipro fell over 1.7%. FMCG major HUL slipped 0.5%.

In the second line shares, aviation, infrastructure, real estate and banks were on buyers' radar.

UCO Bank, Allahabad Bank, Kingfisher Airlines, IVRCL, Jet Airways, GMR Infrastructure, Lanco Infratech, HDIL, Hotel Leela, Pantaloon Retail and SKS Microfinance shot up 3-9%. However, Suzlon Energy tanked 2.5% on downgrade by foreign brokerages.

At 15:05 hours IST: Sensex, Nifty up 1%; Tata Motors, Maruti, PNB surge 3-4%

The BSE Sensex and NSE Nifty rose 1% each in afternoon trade led by consistent buying interest in rate sensitives. Even the Indian rupee recovered more than 20 paise from day's low to trade at 55.84 as against the US dollar, a fall of just 10 paise.

The BSE benchmark climbed 180 points to 16,848.26 led by 26 components. Meanwhile, the NSE benchmark was up 57 points to 5,111 on account of rate cut hopes.

Top commercial vehicle maker Tata Motors and car maker Maruti Suzuki shot up 3% each. Utility vehicle manufacturer M&M rose 2% while two-wheeler majors Bajaj Auto and Hero Motocorp moved up 1% each.

Private sector lenders ICICI Bank, HDFC Bank and Axis Bank gained 1.5% each while country's largest lender State Bank of India rallied nearly 2%. SBI chairman Pratip Chaudhuri expects 100 basis points cut in cash reserve ratio by the Reserve Bank of India in its policy meet on June 18.

Engineering and construction major by sales Larsen & Toubro surged over 2% and cigarette major ITC was up 1.5%.

Software services exporters Infosys and TCS were up 1.4% and 0.8%, respectively.

State-owned oil & gas producer ONGC and top telecom operator Bharti Airtel were up 1% each.

However, shares of Bharti Airtel and Wipro tanked 1.8% each.

At 14:24 hours IST: Nifty hits 5100; Auto, Bankex up nearly 1.5%

Indian equity benchmarks moved up further led by support from banks, auto, capital goods and metals stocks. TCS, ONGC, Infosys, Bharti Airtel and ITC too were quite supportive.

The BSE benchmark rose 149.24 points to 16,817 and the NSE benchmark went up 46 points to 5,100 whereas the broader markets were flat.

The BSE Bankex led the rally, rising 1.5% on hopes of rate cut by the RBI after a flat industrial output for April. India's largest lender State Bank of India surged 1.8% while its rivals HDFC Bank moved up 1.5% and ICICI Bank gained 1.3%.

Country's largest engineering and construction company by sales Larsen & Toubro climbed 2%. Technology majors TCS and Infosys were up over 0.8%. Top telecom operator Bharti Airtel rose 0.9%.

Auto stocks too gained on rate cut hopes. According to industry body Society of Indian Automobile Manufacturers (SIAM), car sales grew 2.78% in May, which was at the slowest pace in seven months due to high interest rates and petrol prices.

Top commercial vehicle maker Tata Motors surged 2.6% while M&M, Maruti, Hero Motocorp and Bajaj Auto were up 1-2%.

Most active shares on the BSE were Pipavav Defence (up 2%) with 34,48,299 equity shares, Pantaloon Retail (up 3.5%) with 15,93,065 and Reliance Infrastructure (down 0.4%) 5,09,320 shares.

In the second line shares, India Infoline, Jet Airways, ILandFS Transportation and Prestige Estate rallied 3-8% whereas Godrej Industries, Phoenix Mills, Cox & Kings, S Mobility and Dewan Housing slipped 3-4%.

The Indian rupee fell 30 paise to 56.04 as against the US dollar. On the global front, France's CAC, Germany's DAX and Britain's FTSE were flat.

At 13:05 hours IST: Sensex rises 100 pts; ICICI Bank, SBI, L&T, Infosys lead

The BSE Sensex and NSE Nifty extended gains amid volatility in afternoon trade, supported by banks, auto, oil & gas, metals and capital goods stocks. Even the Indian rupee recovered from day's low of 56.05; it depreciated by 17 paise to 55.91 as against the US dollar.

The BSE benchmark moved up 102.04 points to 16,770.05 and the NSE benchmark went up 31.45 points to 5,085.55. European markets opened flat with a positive bias and the Dow Jones futures gained 0.6%.

Flat industrial output data for April raised hopes of further monetary easing by the Reserve Bank of India in its policy meet that schedule to be announced on June 18. Even the pressure on central bank mounted after warning of investment downgrade by rating agency Standard & Poor's yesterday and disappointing GDP in Q4FY12.

Market experts feel the RBI may cut repo rate by 25-50 basis points or cash reserve ratio by 50 basis points to give a boost to the sluggish Indian economy.

Industrial output for April came in at 0.1% as against 5.3% in the corresponding period of last year and negative 3.2% in March.

Country's largest lender State Bank of India shot up 1.8% while its rivals HDFC Bank and ICICI Bank were up 1.6% and 1.1%, respectively.

Engineering and construction major by sales Larsen & Toubro surged 1.8% and software services exporter Infosys rose 0.9%.

Auto stocks remained higher - Tata Motors, Hero Motocorp, Bajaj Auto, Maruti and M&M gained 0.5-1%.

Oil & gas producers Reliance Industries and ONGC were up 0.3% and 1%, respectively. Sterlite Industries topped the buying list, rising 2.3%.

However, shares of Dr Reddy's Labs and Wipro were down over 1.5%. FMCG majors ITC and HUL fell 0.2% and 0.5%, respectively.

At 11:21 hours IST: Nifty recovers on hopes of rate cut after disappointing IIP

The BSE Sensex and NSE Nifty recovered on hopes of rate cut after lower than expected industrial output for April. Market experts feel the Reserve Bank of India may cut repo rate by 50 basis points or cash reserve ratio by 50 basis points in policy meet (that schedule to be announced on June 18), say experts.

But State Bank of India chairman Pratip Chaudhuri looks more optimistic. He expects the RBI to cut CRR by 100 bps by June 18, reports CNBC-TV18 quoting NW18.

The BSE benchmark was up 44.22 points to 16,712.23 and the NSE benchmark rose 12 points to 5,066.

In the last policy meet on April 17, the RBI had said there would be less room for further rate cut. But looking at consistent weak growth, experts feel the central bank has to cut rates to revive slowing growth.
Industrial output for April came in at 0.1% as against negative 3.5% in previous month; analysts on average had expected at 1.08%.

Growth in investment led sector capital goods was in negative 16.3% for April and mining growth at -3.1%. However, growth in manufacturing sector came in at just 0.1%, electricity at 4.6% and basic goods at 2.3%.

Country's largest lenders State Bank of India, ICICI Bank and HDFC Bank were up 1% each.

Engineering and construction major by sales Larsen & Toubro rose over 1%. State-owned capital goods company BHEL was up 0.3%.

Auto stocks too were on buyers' radar. M&M, Tata Motors, Maruti Suzuki and Bajaj Auto moved up 0.5-1%.

Infosys, India's No. 2 software services exporter went up 0.5% whereas rival Wipro tanked over 2%.

At 10:27 hours IST: Sensex choppy ahead of IIP; Rupee hits 56/$

The 30-share BSE Sensex and 50-share NSE Nifty stayed marginally lower amid volatility due to fall in rupee. The Indian rupee fell below the 56 level as against the US dollar to 56.05, down 31 paise from previous close.

The market was also waiting for industrial output data for the month of April. CNBC-TV18 poll expects at 1.08% as against -3.5% in previous month. Industrial output data and inflation will be key factors that decide the RBI's move on Monday.

The BSE benchmark declined 45.58 points to 16,622.43 and the NSE benchmark went down 14 points to 5,040.15.

FMCG majors ITC and HUL were down 1.5% and 0.6%, respectively. Capital goods majors BHEL and L&T declined 0.3-0.6%.

Country's largest lender State Bank of India fell over 1% while its rivals ICICI Bank and HDFC Bank were flat.

Software services exporter Wipro tanked over 2% and healthcare company Dr Reddy's Labs slipped 1.7%.

Among auto stocks, M&M, Bajaj Auto, Maruti Suzuki and Tata Motors gained 0.2-0.7%.

Sterlite Industries continued to gain for third consecutive session, rising 1%.

Declining shares outnumbered advancing by 649 to 503 on the National Stock Exchange.

In the second line shares, Godfrey Phillip, Prestige Estate, Bajaj Electricals, BOC India and Pantaloon Retail gained 2-4% whereas S Mobility, Dewan Housing, HT Media, Alstom Projects and Andhra Bank lost 2-4%.

PFC, REC and IVRCL gained 2-3%.

On the global front, Asian markets too were down 0.3-0.8% on rising concerns over eurozone. Optimism over a bailout for Spanish banks faded on concerns that this package will have an impact on public debt. Even uncertainty over elections in Greece and likely bailout request from Italy too dampened the sentiment.

At 9:20 hours IST: Volatile Sensex, Nifty trade marginally lower; Asia slips

The BSE Sensex and NSE Nifty started off trade on a lower note on Tuesday following global downtrend due to endless Greek and Spain concerns.

The market is closely watching industrial output data today - CNBC-TV18 poll sees April IIP at 1.08% as against -3.5% in the previous month.

The BSE benchmark was down 40.44 points to 16,627.57 and the NSE benchmark declined 13.20 points to 5,040.90.

Asian markets were down 0.6-1% today as market experts feel euro 100 billion will subordinate current Spanish debt and will add significantly to Spain's debt/GDP. They also worried about an eventual bailout request from Italy.

Back home, Reliance Infrastructure, JP Associates, Cairn, Sesa Goa, ICICI Bank, Axis Bank, PNB, Bank of Baroda, SBI, HCL Tech, Wipro, Hindalco, SAIL, BHEL and L&T fell in early trade.

However, BPCL and ONGC outperformed, rising 1.6% and 0.7%, respectively due to falling crude oil prices. WTI crude fell over 1% to USD 81.7 a barrel today.

Bajaj Auto, Infosys, HDFC and HDFC Bank too were on buyers' radar.

The CNX Midcap Index declined 27 points to 6,985. About two shares declined for every share rising on the National Stock Exchange.

In the second line shares, Kingfisher Airlines surged 3% and GIPCL gained 2%.

Pipavav Defence, Indraprastha Gas and Raymond moved up 1-1.5%.

Trading favourites like NCC, GMR Infra, HCC, Indiabulls Real, Educomp Solutions, Suzlon Energy, SKS Microfinance and GVK Power were down 1-2%.