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Sensex rebounds 115 points on sudden WPI fall

Heavy buying in banking shares on lower-than-expected wholesale inflation and a spike in oil and gas stocks on falling global crude prices helped the BSE’s benchmark Sensex recover by over 115 points to end at 18,357.80 on Monday. The Bombay Stock Exchange 30-share barometer initially touched a low of 18,144.22 on weaker Chinese data but later bounced back on a fall in WPI inflation to 5.96 per cent to close up by 115.24 points or 0.63 per cent at 18,357.80. Last Friday the index had fallen by almost 300 points after dismal Q4 performance and FY14 guidance by Infosys.

The 50-issue CNX Nifty of the NSE also firmed up by 39.85 points or 0.72 per cent to end at 5,568.40 on Monday. State Bank of India (SBI) and HDFC led financial stocks in 30-share Sensex. ‘The WPI inflation dipped to 40-month low. This has increased the expectation of the some monetary easing from the RBI in its coming policy... crude oil prices saw a sharp fall and consequently the oil and gas pack showed buying interest,’ said Inventure Growth and Securities CMD Nagji K Rita.

Refinery-related stocks such Oil and Natural Gas Corporation (ONGC) and Indian Oil Corporation ltd (IOCL) were at the forefront on buying after US crude oil futures dropped below $90 a barrel. As a result, the BSE-Oil & Gas was the top gainer from sectoral indices, with a rise of 2.37 per cent.

Reliance Industries Ltd (RIL) gained over 2 per cent ahead of the announcement of its earnings for the fourth quarter of fiscal 2012-13. However, metal counters like Sterlite and Tata Steel saw profit-booking on sluggish economic indicators from China, a major importer of copper and other metals.

Outside of major indices, gold-related stocks including Muthoot Finance and Manappuram Finance fell by over 10 per cent each on the precious metal falling to a 15-month low on Monday.

On the global front, Asian stocks closed lower between 0.20-1.55 per cent. European markets too were quoting down in their early trade. In Europe, France’s CAC was down by 0.76 per cent, the DAX by 0.64 per cent and the FTSE by 0.89 per cent.
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