Sensex ends 119 pts up; broadcast cos rally on FDI hopes

The BSE Sensex gained momentum for the third consecutive session on Tuesday, led by banks, on speculation that the Reserve Bank of India may cut rates in credit policy that schedule to be announced on April 17. Even oil & gas and metals stocks added more gains.

With the RBI policy and earnings, April is going to be an important month for the market. Sanjay Dutt, director of Quantum Securities says, RBI rate cut in April will support market. Country's largest lenders State Bank of India and ICICI Bank gained nearly 2% while rival HDFC Bank was up 0.5%.

The market shed some gains in the last hour of trade due to moderate profit booking in European markets after yesterday's rally. The BSE benchmark rose 119.27 points or 0.68%, to close at 17,597.42. Meanwhile, the NSE benchmark was up 40.60 points at 5,358.50.

Dutt prefers equities over other asset classes at this point. He sees the Nifty rising beyond 5,600 in the next few months.

"Historically, April has been a great month in the last five years," noted Ryan Detrick, senior technical strategist at Schaeffer`s Investment Research. "So from a seasonal point of view, we`re entering a bullish time frame," he said.

The bond yields spiked sharply today ahead of inauguration of government's borrowing season with the largest ever borrowing in a single week at Rs 18,000 crore. Yield on the 12-year bond, Rs 8000 crore of which will hit the market, has jumped to a 4-month high of 8.76%. The ten year 2021 bond yield (carrying a coupon rate of 8.79%) went up by 11 basis points to 8.68%.