Sensex bounces back on rate cut hopes

Mumbai - A benchmark index of Indian equities markets closed in the positive Monday, recovering from the five-month lows, after the Reserve Bank of India indicated rate cuts to boost growth.

The 30-scrip Sensitive Index (Sensex) of the Bombay Stock Exchange (BSE) closed 0.15 percent or 23.24 points higher at 15,988.40 points, after hitting a five-month low of 15,748.98 points in the intra-day.

The Sensex, which opened in the red at 15,808.88 points, briefly surpassed the 16,000-point mark and touched a high of 16,012.84 points in the intra-day.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange closed 0.14 percent higher at 4,848.15 points after touching a low of 4,771 points in the intra-day.

The markets recovered in the afternoon session after RBI deputy governor Subir Gokarn said that the central bank has some room to cut policy rates.

Gokarn said the decline in crude oil prices in the international markets and moderating core inflation coupled with slowdown in economic growth would give some room for easing monetary policy.

Following the statement, there was good buying support in interest rate-sensitive realty, capital goods, banking and auto stocks.

The BSE capital goods index advanced 2.08 percent, the realty index rose 1.35 percent, banking index rose 1.10 percent and auto index closed 0.78 percent higher.

Prominent Sensex gainers included: L&T, up 3.43 percent at Rs.1,173.40; ONGC, up 3.19 percent at Rs.254.15; DLF, up 1.97 percent at Rs.186; Tata Motors, up 1.89 percent at Rs.228.75; and RIL, up 1.31 percent at Rs.692.65.

Gail India, down 3.47 percent at Rs.319.50; Jindal Steel, down 2.72 percent at Rs.417.40; Tata Power, down 2.49 percent at Rs.90.15; and Bharti Airtel, down 2.31 percent at Rs.294, were among the major losers at the 30-scrip Sensex.