Sensex ends 56 pts up; banks, auto gain ahead of RBI policy

The BSE Sensex closed just 0.3% higher on Monday, with support especially from rate sensitives ahead of RBI's annual monetary policy for FY13 scheduled to be announced on April 17. The BSE Bankex, Capital Goods, Realty and Auto indices were up more than 1% today hoping for a 25 basis points rate cut.

The BSE benchmark rose 56.44 points, to close at 17,150.95 and the NSE benchmark went up 18.75 points to end at 5,226.20.

Anand Tandon, CEO, JRG Securities also believes that expectations of a rate cut of 25 basis points, but for the next rate cut one has to wait for next six months.

India's wholesale price index (WPI) rose a faster-than-expected 6.89% in March from a year earlier, mainly driven by higher food prices, government data showed on Monday. A CNBC-TV18 poll had estimated that wholesale price inflation rate may slow marginally in March to 6.7% as compared to the 6.95% figure of February.

A Prasanna, economist, ICICI Securities says "For the RBI what should really matter is the manufacturing number as policy rates act on the demand side, so we think RBI will cut rates. But they will remain cautious in whole of 2012-13 as broadly we expect headline inflation to be at 7% given high food prices and core inflation at 6%."

Shares of Tata Motors, country's largest commercial vehicle maker gained nearly 4% as the company sold (global sales) 1.39 lakh units in March. Maruti Suzuki, top car maker was up 1.4%. Real estate firm DLF moved up 0.83%.