Mkts ignore poor growth; Sensex up 169 pts on rate cut hopes

Shares from metal, power, PSU, banking, consumer durable, refinery and capital goods segments registered sharp to moderate gains. The Bombay Stock Exchange 30-share barometer resumed higher and gradually moved upwards to settle at 19,339.90, a gain of 168.99 points or 0.88 per cent.

HDFC, ICICI Bank, ONGC, SBI, BHEL, Bharti Airtel, HDFC Bank, TCS, Jindal Steel, M&M and Sterlite Industries shares notched handsome gains on good buying.

The broader 50-issue Nifty of the NSE also rose by 54.85 points or 0.94 per cent to close at more-than 19-month high of 5,879.85, level not seen since April 21, 2011.

Brokers said the market remained in cheerful mode despite July-September quarter GDP coming at 5.3 per cent year-on-year as investors bet on a rate cut in RBI's policy review as early as January 2013 to boost economic expansion.

Industry growth in Q2 was hit mainly due to poor show by manufacturing, which grew marginally by 0.8 per cent, against 2.9 per cent in the same period of 2011-12.

"We think RBI will likely base its rate stance in December policy on November WPI inflation reading. We expect RBI to cut the repo rate in January 2013," said Espirito Santo Securities Chief India Economist Deepali Bhargava.

Given the tight liquidity scenario, a CRR cut at its December 18, 2012 policy review also looks likely, according to BNP Paribas.

The Sensex had regained 19,000 mark level by surging 834 points in the past four days on global cues and expectations that the government will push through economic reforms.

Reflecting the buying activity throughout the truncated week, both the key indices, the Sensex and the Nifty, recorded their biggest weekly gains in absolute term of 833.33 points and 253.25 points respectively -- their largest since last week of November 2011. (MORE)