Sensex holds gains after positive inflation data; RIL, SBI top gainers

NEW DELHI: The BSE Sensex shed some of its gains in the afternoon trade on Friday, but was still trading in a positive zone following lower-than-expected inflation numbers for the month of November.

At 02:00 pm, the 30-share BSE Index pared some of its gains and was trading 0.23 per cent or 44 points higher at 19,266. SBI (1.7 per cent), ICICI Bank (0.85 per cent) and RIL (1 per cent) led the gainers pack.

The Nifty was at 5,864.60, up 13 points or 0.22 per cent. It touched a high of 5,886.15 and a low of 5,839.15 in early trade today.

Earlier in the day, government data showed that the wholesale price index (WPI) rose a slower-than-expected 7.24 per cent in November from a year earlier.

Following the drop in inflation numbers, stocks of rate-sensitive sectors such as banks and real estate were leading the gains on rising hopes the Reserve Bank of India will move towards easing interest rates starting early next year

According to analysts, a moderating in inflation numbers is a pleasant surprise, yet the number is quite high as per central bank's estimates. Even though inflation is showing signs of slowing down, it might not be enough for the RBI to cut rates in December.

“Prime Minister’s economic advisor C Rangarajan said on Friday he doesn’t expect the central bank to cut interest rates at its next policy meeting on December 18,” Reuters reported.

“But despite the slowdown, the Reserve Bank of India (RBI) has not lowered interest rates since April because inflation has remained near 7 per cent,” added the report.

Fertiliser companies surged 3-15 per cent in early trade after the Cabinet Committee on Economic Affairs (CCEA) approved the long pending urea investment policy that will help set up new fertiliser plants and expanding the existing ones.

The BSE Midcap Index was up 0.50 per cent and the BSE Smallcap Index gained 0.14 per cent.

Among the sectoral indices, the BSE Power Index moved 0.36 per cent lower, and the BSE Consumer Durable Index was down 0.94 per cent.

The BSE Realty Index was up 1.3 per cent, followed by the BSE Banking Index which was trading 0.72 per cent higher. The BSE Metal Index rose 1.4 per cent and the BSE Oil & Gas Index was up 0.53 per cent.

SBI (1.9 per cent), Hindalco (3 per cent), Tata Motors (1.5 per cent), TCS (1.6 per cent) and RIL (1.09 per cent) were among the Sensex gainers.

BHEL (1.3 per cent), Maruti Suzuki (0.80 per cent) and Bharti Airtel (1.5 per cent) were among the index losers.