The 30-share Senxes gained over 200 points to rise to its highest level since April 3 on hopes the RBI will be lowering interest rates. Holdings in our Excel India Fund led the gains with Tata Motors rising 3.8% while State Bank of India and ICICI Bank surged more than 2%. Other gainers include Infosys which rose more than 2% and ITC which went up over 1%.
The sentiment is based on hopes the RBI will be pressured into lowering interest rates after Finance Minister P. Chidambaram said high borrowing costs were burdening consumers. Inflow of foreign money also aided the rally as foreign institutional investors have bought more than RS 4,000 crore worth of India equities in the previous seven sessions. The Indian rupee appreciated to 55.26 against the US dollar today.
The BSE Sensex rose 1.28% to 17,635.48 points while the 50-share Nifty gained 1.25%. Stocks sensitive to interest rates led the gains but even technology majors like TCS and Infosys gained as India’s economy continues to strengthen.