Likely rate cut boosts markets; Nifty ends above 2750

04 December 2008

The benchmark indices saw a sharp rally in the second half of session, as the central bank, RBI is likely to cut rates this week. There are also hopes that the new package may be announced for infrastructure projects in due course. Banking & financial, realty, capital goods and power stocks witnessed huge buying interest.

Oil & gas was another sector in the lead due to the news that the government has set gas price at $4.20/mmbtu for all customers. Gas price is an exclusive of transport cost and tax. Reliance Industries, RIL will sell 1.40 mmscmd gas from D6 to Ratnagiri in January-March.

Positive European cues and decline in inflation numbers also helped the markets a bit.

Finally, the Sensex shut shop above 9,000 mark, after three days of staying below the same level. It closed at 9,229.75, up 482.32 points or 5.51% over previous close. The 50-share NSE Nifty surged 131.55 points or 4.95%, to settle at 2788.

The broader indices also joined the league led mostly by media & entertainment stocks. BSE Midcap Index rose 92.21 points or 3.26% to 2,922.80 and Small Cap Index ended at 3,331.80, up 66.70 points or 2.04% over previous close. Nifty Midcap 50 went up by 3.49% to 1192.20.

The street was buzzing ahead of likely announcement of rate cuts as well as economic stimulus package. The Reserve Bank is likely to cut repo and reverse repo rates on Saturday, sources said. However, a CRR cut is unlikely. Banks have also been asked to cut deposit rates. There was a strong indication from today's RBI press conference that rate cut may happen soon.