Sensex, Nifty climb as slower growth raises rate cut hopes
The Nifty was up 0.41% at 11,974,85 as of 0444 GMT, while the Sensex rose 0.47% to 39,900.01.Updated: Jun 03, 2019 14:01 IST
The Sensex and Nifty rose on Monday, despite weak gross domestic product (GDP) data, as investors pinned hopes on a possible rate cut to bolster the economy at the Reserve Bank of India’s (RBI) policy meeting later this week.
Data showed that India’s economy grew at its slowest pace in nearly two years and lagged China, as Prime Minister Narendra Modi took office for a second term and surprised the markets by naming former defence minister Nirmala Sitharaman as the new finance minister.
The Nifty was up 0.41% at 11,974,85 as of 0444 GMT, while the Sensex rose 0.47% to 39,900.01.
“There are a lot of mixed cues for India; the GDP data is making a strong case for a rate cut by the RBI,” said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.
“Everyday there is a different news flow. Earnings season has ended and there is no volatility from that end; generally the trend this week looks positive.”
The RBI is expected to reduce interest rates at its June 4-6 policy meeting. Many economists and officials expect the government to push long-pending reforms in the next parliamentary session, beginning on June 17, after its landslide election victory.
Hero MotoCorp Ltd was the top gainer on the NSE index, rising as much as 3.61%. The motorcycle maker, on Saturday, posted a 14% rise in monthly sales sequentially.
Asian Paints’ shares rose as much as 2.8%, its highest in four weeks, while Britannia Industries Ltd rose over 2% to its highest since April 26.
Meanwhile, auto names such as Mahindra and Mahindra Ltd dropped 1.37% to over a week’s low, Tata Motors Ltd fell 2.43%, while Maruti Suzuki India Ltd slipped up to 1.6 percent, dragging the Nifty Auto Index to its lowest since May 17.
All three auto companies, on Saturday, posted weak monthly sales; Tata Motors also said that the market sentiment continued to be muted.
(The story has been published from a wire feed without any modifications to the text, only the headline has been changed)