Nifty soars 109 points on rate cut hopes, reform promise

After three days of frantic sell-off, shares bounced back with a vengeance as the benchmark CNX Nifty today zoomed by 109 points to close above the 5,800 mark on easing headline inflationary pressure amid rupee stability and renewed hopes of a rate cut by Reserve Bank next week.
A sense of calm returned to the markets after days of turbulence as the Finance Minister's assurance to roll out a series of reforms to revive economy and a strong rebound in rupee value against the dollar boosted investor sentiments.
Furthermore, a decline in WPI-based inflation, which slipped to a three-and-a-half year low of 4.7 per cent in May, raised fresh hopes of a cut in key interest rates.

However, the rupee's recent volatility and expanding current account deficit amid still high retail inflation may restrict RBI from undertaking a big-size rate cut, analysts said. The RBI will announce its monetary policy on June 17.
Financials, FMCG, oil & gas, auto, infra, metal and healthcare stocks witnessed huge buying interest.
After a strong opening against the backdrop of buoyant global sentiment, the key index maintained its bullish momentum throughout the day on frantic retail as well as fund buying supported by short-covering.

On the global front, Asian and European stocks rebounded from multi-month lows, bolstered by upbeat US macro-economic data and a drop in unemployment claims amid confidence over the ability of the world's largest economy to withstand a tapering off in Federal Reserve bond purchases.

The 50-share index hit a high of 5,819.40 before ending at 5,808.40, posting a massive gain of 109.30 points, or 1.92 per cent, over its previous close.
Hindalco topped the smart movers' list, gaining 7 per cent followed by Tata motors, Maruti, Tata Power, Reliance, JP Associates, Reliance Infra, L&T, ICICI Bank and BPCL.
The key laggards included IndusInd Bank, Hero Moto, HUL, Bharti Airtel and Cipla.
Turnover in the cash segment moved down to Rs 9,609.60 crore from Rs 9,998.73 crore yesterday. A total of 5,327.88 lakh shares changed hands in 52,32,544 trades. Market capitalisation stood at Rs 62,85,533 crore.