Sensex pole vaults 490 pts to 28-month high on rate cut hopes

Markets were in a jubilant mood today with BSE Sensex zooming 490 points to close at 28-month high of 20,200 and NSE Nifty soaring over 150 points to 6,100- level on buying in realty, banks and auto shares after RBI's "happy" remark on falling inflation fuelled rate cut hopes.
Investor wealth, as measured by market capitalisation, surged by a staggering Rs 1.30 lakh crore as three stocks rose for fall of every two. This more than recovers Rs 1 lakh crore that was wiped off on across-the-board selling on Monday.
The Bombay Stock Exchange 30-share barometer today resumed higher and gradually rose to settle at 20,212.96, a rise of 490.67 points or 2.49 per cent. Previously, it had concluded at 20,301.10 on January 5, 2011. Today's gain is the highest in percentage terms since June 2012.

NSE Nifty index jumped by 151.35 points or 2.52 per cent to end at 6,146.75. Similarly, MCX-SX flagship index SX40 closed 245.6 points, or 2.10 per cent, higher at 11,925.14.
"We certainly will take note of the softening of inflation and the external payments situation in the next mid-quarter policy statement on June 17," RBI Governor D Subbarao said in Frankfurt. He said, he was happy to see that inflation has come down to below 5 per cent.
Today's stock market rally has been partly fuelled by "heightened expectations" of further easing by the central bank going forward, said Sanjeev Zarbade, Vice President - PCG Research, Kotak Securities.

Mortgage major HDFC, state-run SBI and private lender ICICI Bank were the star performers of the day with gains of 3.8-4.7 per cent. Smart rise in RIL, ITC, L&T, Tata Motors, M&M and ONGC helped the trio together contribute over 400 points to the Sensex surge.
Besides interest-rate related stocks, PSU, refinery, pharma, metal and consumer durables also attracted buying.
Rate-sensitive S&P BSE-Realty was the biggest gainer among sectoral indices at 4.04 per cent, followed by BSE Bankex (3.95 pc), BSE-CG (3.00 pc) and BSE-PSU (2.36 pc).