The BSE benchmark Sensex today recovered by 117 points on buying funds on hopes of rate cut by RBI after softening inflation and easing worries over eurozone debt crisis.
The 30-share index gained 117.11 points, or 0.73% to close at 16,154.62 with metal, capital goods and power stocks leading the gains. It had lost 138 points in the previous session.
The broad-based National Stock Exchange index Nifty rose by 34.75 points, or 0.72, to 4,866. Brokers said a firming trend in overseas markets as signs that Europe’s debt crisis is easing supported the market.
Investors flocked to government bond sales in Italy and Spain, which eased concerned over debt crisis. Also, hopes of change in RBI's tight monetary stance after food inflation remained subdued bolstered the sentiment. The RBI next policy meeting is on January 24.
The metal sector index gained the most by 3.21% to 10,756.45 as Tata Steel surged 7.11% to Rs 415.70 and Coal India by 5.56% to Rs 343.60. The capital goods sector was second best performer by adding 2.86% to 9,297 with Suzlon Energy gaining 8.72% to Rs 22.45 and Larsen and Toubro by 3.84% to Rs 1,172.60.
However, market major Reliance Industries and Infosys fell on sustained selling. While RIL lost 0.75% to Rs 732.05 and Infosys fell by 0.12% to Rs 2,585.55.
Infosys, the second- largest software services provider slumped 8.4% yesterday after it cut its full-year sales forecast on weaker economic growth in major markets including Europe.