Taking a cue from Reserve Bank of India’s expectations that inflation risk is balanced and a faster disinflation will provide room for rate cuts, the Indian markets extended their gains on Tuesday with support from the foreign institutional investors. The benchmark Sensex at the Bombay Stock Exchange rose by 173 points or 0.7 per cent to close at a new high of 24,858.6 on Tuesday.
The broader Nifty, too, rose by 0.7 per cent to close at a new high of 7,415.9.
The RBI kept key policy rates unchanged on Tuesday. The move lifted the market sentiment as the metal and realty indices at BSE rose sharply by 5 and 3.2 per cent respectively. Among the Sensex companies Tata Steel and Sesa Sterlite emerged as the biggest gainers and their shares rose by 6.7 and 6.5 per cent respectively.
The FII’s too invested a net of Rs 575 crore on Tuesday. Bank counters came under selling pressure, while rate sensitive realty index jumped 3.15 per cent. “Market has taken the same positively … More and more inflow will come in anticipation of robust budget. PSU stocks are getting more attractive after PMO decided that PSUs be brought under one umbrella,” said Kishor P Ostwal, CMD, CNI Research.