Indian shares joined a global rally in equities after Federal Reserve Vice Chairman Janet Yellen came out in support of Chairman Ben Bernanke's efforts to keep interest rates low and China vowed to boost spending and maintain a prudent monetary policy in 2013 to deliver continuous economic growth.
With hopes of stimulus buoying risk appetite, investors shrugged off downbeat data, which showed India's service sector growth fell notably in February. The growth in the services sector stood at 54.2 in February, down from 57.5 in the previous month, a survey by Markit Economics and HSBC Bank showed.
Easing concerns over this year's Union Budget, Finance Minister P Chidambaram yesterday said the government will soon announce more measures to boost exports and investment. Separately, Moody's Investors Service said in a report that the Budget offers a "realistic" plan to meet the country's fiscal deficit target.
High current account deficit is the government's biggest concern at present and the best way to narrow the deficit is by increasing exports at a faster pace than the growth in imports, the Wall Street Journal quoted finance ministry's chief economic adviser Raghuram Rajan as saying on the sidelines of an event in Pune.
The benchmark BSE Sensex ended the day up 265 points or 1.4 percent near its day's high at 19,143, while the broader Nifty index rose by 86 points or 1.5 percent to 5,784. Second-line stocks also recovered from their recent sell-off, with the BSE mid-cap and small-cap indexes ending up 1.7 percent and 1.1 percent, respectively.
Rate-sensitive banking stocks led the rebound on hopes that the RBI may cut interest rates later this month. SBI, Bank of India, IDBI Bank, Axis Bank and ICICI Bank rose 2-3 percent, while Union Bank of India soared nearly 6 percent.
In the realty sector, DLF rallied 3.6 percent ahead of a board meet tomorrow to discuss share sale to meet the minimum public shareholding norms. Godrej Properties, Sobha Developers and Indiabulls Real Estate jumped 3-5 percent.
Metal stocks rallied on bargain hunting following recent steep losses. Tata Steel, Jindal Steel, Hindalco, Sterlite, and SesaGoa rose 3-5 percent.
Energy giant Reliance Industries rose 1.6 percent on a brokerage upgrade. Dr Reddy Laboratories gained 1.7 percent as it launched generic Zoledronic Acid injection in the United States. Tata Motors jumped over 4 percent on reports it has reduced the prices of its passenger cars, excluding Nano to prevent falling sales.
Videocon Industries closed 2.1 percent higher on stake sale reports. Natco Pharma soared 5.3 percent after the Intellectual Property Appellate Board upheld the grant of compulsory license issued to the company for selling generic copies of Bayer's cancer drug Nexavar.
Essar Oil rallied a whopping 22 percent on a brokerage upgrade after the company received phase III environmental clearance for its coal bed methane gas field at Raniganj in West Bengal. Steel Strips Wheels soared 11.7 percent after reporting higher export sales for February.
by RTT Staff Writer
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