Sensex Rallies On Rate Cut Hopes

The Indian markets rose sharply on Monday as tepid inflation data released last week and the India Meteorological Department's (IMD) prediction of a timely start to the monsoon bolstered hopes for a rate cut when the RBI meets to review its policy on June 2. Finance Minister Arun Jaitley told PTI on Sunday that his "expectation" from RBI governor Raghuram Rajan was the same as the general expectation of an interest rate cut.

Meanwhile, activity in India's manufacturing sector rose modestly in May, but going ahead "weak demand conditions" may persist that could have a negative impact on the industrial output numbers, SBI said in a research report.

The benchmark index BSE Sensex jumped 363.30 points or 1.33 percent to close at 27,687.30, while the broader Nifty index ended at 8,373.65, up 111.30 points or 1.35 percent from its previous close.

Among the prominent gainers, HDFC, ACC, Tata Power, Lupin, Ambuja Cement, UltraTech, GAIL and Dr Reddy's Laboratories climbed 3-4 percent.

Oil companies BPCL, HPCL and IOC rallied 3-5 percent after they hiked petrol price by Rs 3.13 a liter and diesel by Rs 2.71 per liter over the weekend.

Indraprastha Gas climbed 3.3 percent after the company raised CNG and piped cooking gas prices in the Delhi-NCR region.

Tata Coffee soared 6.5 percent on reporting an over two-fold jump in its consolidated net profit for the fourth quarter ended March. Jain Irrigation Systems jumped 15 percent after its Q4 profit beat estimates.

Sterlite Technologies gained 4.2 percent. The company said it has received board approval for a corporate restructuring plan involving demerger of its power and telecom businesses.

Shares of Bharti Airtel rose 1.8 percent. The telecom major said it had received $2.5 billion credit line from two Chinese banks to invest in the growth of data networks across its global operations that now span to 20 countries.

JK Paper rose 2.2 percent on posting turnaround results for the fourth quarter ended March. Nestle India gained a percent after reporting a 24 percent rise in Q1 net profit.

Torrent Pharma and Asian Paints fell 2-3 percent on disappointing results.

On the global front, the other Asian markets turned in a mixed performance as weak U.S. data and signs of continuing downturn in the Chinese real estate market offset positive core machinery orders data from Japan. Investors also kept an eye on Greece after Prime Minister Alexis Tsipras said he won't strike a deal with bailout lenders at any cost.

The European markets advanced in early trading, led by gains in energy stocks as oil prices rose in Asian deals, supported by concerns that tensions in Yemen and Iraq could disrupt production in the crude-rich Middle East.

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