BSE Sensex up 115 at 18,357.8 points

The Sensex rose today, recovering from seven-month lows after slowing inflation and lower crude and gold prices led to hopes that the Reserve Bank of India (RBI) will likely cut interest rates at its May review.

Lenders such as State Bank of India led gainers on hopes RBI would now have room to ease monetary policy for a third time this year.

Investors also welcomed the sharp slump in gold and crude oil prices, which if sustained, would help ease narrow the current account deficit, a factor which has been cited by the central bank as a key variable in its monetary policy making.

"The commodity price movements played out in the market today. The lower WPI number has also raised rate cut hopes," said Sudip Bandyopadhyay, managing director and chief executive at Destimoney Securities.

"The market will continue to remain volatile. We will see counter specific and sector specific action."

The Sensex rose 0.63 per cent, or 115.24 points, to 18,357.80 after earlier hitting its lowest intraday level since September 13.

The 50-share NSE index gained 0.72 per cent, or 39.85 points, to 5,568.40.

Both indexes thus recovered from sharp falls on Friday, when the BSE slumped 1.6 percent after software service exporter Infosys issued lower-than-expected revenue guidance, sparking a selloff in technology stocks.

Lenders gained after data showed wholesale price inflation cooled to 5.96 per cent in March, lower than 6.84 per cent in February.