Stock markets on Wednesday rose nearly two per cent on Wednesday to their highest level in more than three months as easing inflation and forecasts of above-average monsoon rains sparked hopes of better economic growth and another rate cut by the Reserve Bank of India. The Sensex stayed in the positive zone throughout the session and ended higher by 481.16 points or 1.91 per cent at 25,626.75 — its highest closing since January 1. Retracing the 7,800-level, the broader NSE Nifty hit a high of 7,864.80 before settling at 7,850.45, up 141.50 points or 1.84 per cent. The market will remain closed on Thursday and Friday on account of Ambedkar Jayanti and Ram Navmi, respectively. [related-post] Jayant Manglik, president, retail distribution, Religare Securities said: “The Indian Meteorological Department (IMD) has forecast surplus monsoon this year after two consecutive droughts, which triggered positivity across the board. Also, improved macroeconomic data of CPI inflation and IIP further boosted the sentiment. Some support also came in with the International Monetary Fund’s latest World Economic Outlook report, which despite cutting global growth estimate, projected India’s growth to be at 7.5 per cent in 2016-17.” After two consecutive drought years, the country will receive “above normal” monsoon with a fair distribution of rainfall across major parts of country and it will be a “good year”, the Met office predicted on Tuesday, easing fears of struggling farmers. IMD director general Laxman Singh Rathore had said there are 94 per cent chances of country receiving “normal to above normal” rainfall while there is only one per cent probability of “deficient” rainfall. If the monsoon turns out to be better this year, the economy will revive, analysts said. Adding to the bullish fervour, industrial production grew at 2 per cent in February after remaining negative for three months and retail inflation dropped to a 6-month low of 4.83 per cent in March, reflecting some improvement in the economy and offering further scope to the RBI to stay accommodative. Interest rate sensitive auto and banking stocks gained on hopes that the RBI could ease interest rates further after latest retail inflation in March fell to a six-month low of 4.83 per cent on account of cheaper food articles such as vegetables and pulses as against 5.26 per cent in February.
