Sensex jumps 322 points on rate cut hopes

Staging a surprise comeback, the benchmark BSE Sensex on Friday surged by 322 points to 27,828.44 on across-the-board buying in blue-chip stocks as investors started building fresh long positions in the new series on anticipation of a possible rate cut.

"Much to market surprise, equity benchmarks gained nearly one and half per cent amid negative global cues. The recovery was reflection of the optimism among the participants ahead of the release of GDP data," Jayant Manglik, president-retail distribution at Religare Securities.

Moreover, beginning of June series in the derivatives segment, supported the upside in stock prices, traders said.

The 30-stock index opened on a positive note at 27,553.03 but quickly slipped into the red on profit booking. Later, it bounced back at a rapid pace to hit a high of 27,888.32.

The gauge finally settled 321.73 points or 1.17 per cent higher at 27,828.44, its biggest since May 18.

On similar lines, The National Stock Exchange (NSE) Nifty recaptured the 8,400-mark by rising 114.65 points or 1.38 per cent to 8,433.65, after hovering between 8,443.90 and 8,305.70, intra-day.

Mahindra & Mahindra (M&M) rose 4.89 per cent on the BSE after it reported March quarter results during market hours. Bharti Airtel at 5.98 per cent was the best Sensex gainer, followed by M&M, GAIL 2.30 per cent, Maruti Suzuki 2.26 per cent and Coal India 2.14 per cent.

In overseas markets, European stocks were trading lower on Friday after the head of the IMF warned that Greece could fall out of the euro zone. Key indices in Germany, France and the the UK were off between 0.27 and 1.08 per cent.

"Being the first day of June F&O series, the markets rallied despite weak European market cues. The European markets fell for a second day as the Greece has not reach a debt agreement with creditors," said Alex Mathews, Head Research of Geojit BNP Paribas Financial Services.

Asian stocks were trading narrowly mixed. Key indices in China, Hong Kong, Singapore and Taiwan fell in the range 0.11 to 0.75 per cent, while indices in Japan and South Korea were up 0.06 to 0.19 per cent.

Meanwhile, foreign portfolio investors sold shares worth Rs 792.54 crore, while Domestic institutional investors bought shares worth Rs 683.29 crore on Thursday.

"...local equities traded positively and tried to recover from their recent losses. Price sensitive stocks and blue chips gained on value-buying and short-covering," said Jignesh Chaudhary, head of research at Veracity Broking Services.