Indian Stocks Clock Fresh Record As Inflation Data Stokes Rate Cut Hopes
The Indian stock market touched a fresh high on Monday, led by rate-sensitive stocks of banks and property companies on hopes of an interest rate cut by the Reserve Bank of India (RBI), following a sharp decline in consumer price inflation.
The S&P BSE Sensex rose 0.4 percent to 30,322, while the NSE Nifty advanced nearly 0.5 percent to 9,445. Tata Steel Ltd. and Dr Reddy’s Laboratories Ltd. were the biggest gainers on the Sensex, rising more than 3 percent each.
The market breadth was skewed in favour of bulls, as about five stocks advanced for every four stocks that declined. As many as 11 of the 13 sectoral indices compiled by BSE Ltd. ended higher led by metals.
“Metal stocks have a better outlook as global economy improves amid expectations of a rebound in the second-half of the year,” Rajesh Shanbhag, advisory head-alternate channel at Way2Wealth Brokers told BloombergQuint by phone.
The rupee rose to 64.09 against the U.S. dollar, its strongest level since April 27, on expectations of additional foreign portfolio inflows into the Indian markets.
Consumer price inflation fell to 2.99 percent in April, well below the central bank’s comfort zone, compared to estimate of 3.30 percent. The data bolstered hopes that the RBI would ease interest rates in its upcoming monetary policy review on June 7.
The 10-year benchmark bond yield fell 9 basis points to 6.82 percent, its lowest since April, from its 6.91 percent close on Friday.
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