Markets surge on receding rate hike fears

After a flat closing yesterday, the markets staged a stellar comeback today as a lower GDP growth in March eased fears of a hawkish policy stance by the Reserve Bank at its policy meet scheduled next month. The BSE benchmark index, Sensex closed the day up 271 points at 18,503 while the Nifty added 87 points to end at 5,560.In the broader markets, the midcap index surged 1.8% outperforming the Sensex which gained 1.5% and the smallcap index closed adding 0.9%

Earlier the day, the markets started on a firm start on the back of positive Asia cues. However, the markets witnessed some selling pressure in early afternoon as the GDP numbers were released only to retrace and move further north. The barometer index BSE Sensex and the CNX Nifty hit their highest level in more than two-weeks in the afternoon trades. The positive cues from the global markets front added to the buoyant sentiment. Chandan Taparia, Derivative analyst, Anand Rathi Financial Services says if Nifty sustains above 5530 levels then rally may continue in the market towards 5600 levels, where fresh call writing seen. Whereas if it fails to hold 5520, then Nifty may consolidate in a narrow range of 5400-5520 levels.

The GDP growth slowed down to 7.8% in March, lower than the anticipated 8.3%. The manufacturing sector grew 5.5% in January-March from a year earlier, while farm output rose by an annual 7.5%, the data showed. The lower than expected GDP figure has eased concerns of an aggressive monetary tightening by the central bank to tame inflation.

On the global front, the Hang Seng, Nikkei and Seoul indices have gained in the region of 2 % each, while the FTSE, CAC and DAX gained 1% each.

Only one scrip among the Sensex-30 closed in the negative. Cipla was down 1% at Rs 326.

Jaiprakash Associates (Rs 86) up 4.5% was the top Sensex gainer followed by HDFC Bank (Rs 2388), DLF (Rs 238), ITC (Rs 193), SBI (Rs 2297), Reliance Infrastructure (Rs 569), Sterlite Industries (Rs 171), Jindal Steel (Rs 649) and Hindalco (Rs 197) added 2% each.

The market breadth was positive. Of the total 2943 stocks traded on the BSE, 1831 stocks advanced while 1001 declined.