Sensex cracks a ton...Nifty ends near 5600

The key Indian equity indices closed higher for a second day in a row on Wednesday, as mixed economic reports strengthened the belief that the RBI may not take an aggressive stance on monetary policy going forward. The Indian stocks had rallied on Monday after Q4 GDP came in below estimates, stoking speculation that the central bank could turn less hawkish to avert a further drop in economic momentum.


The Indian market seemed to be in a different mood altogether today despite a muted Asian markets and indecisive trend in the European stocks. In fact, the global economic landscape doesn't look all that rosy amid deceleration in the manufacturing sector from Australia to Europe. Still, the Indian market beat the tepidness in the overseas markets to close up for the fourth time in the past five sessions.




The BSE Sensex finished at 18,608, up 105 points or 0.6% over the previous close. It had earlier been as high as 18,636 and as low as 18,514. It had opened at 18,527. The NSE Nifty closed at 5,592, up 32 points or 0.6% from the last close. It had touched a day's high of 5,597 and a day's low of 5,559. It had opened at 5,561.


The BSE Small-Cap and BSE Mid-Cap indices gained 0.8% each.


Market breadth was favourable with nearly 1,800 shares rising and 1,000 shares falling on the BSE.


"The Indian market managed to outperform the world equities, thanks to encouraging auto sales numbers and exports data. But, the manufacturing PMI and infrastructure growth disappointed. There seems to be a growing feeling that with the drop in Q4 GDP and deceleration in the core sector growth, the RBI might just refrain from a larger increase in policy rates. FII flows have improved lately, which is also giving the market an excuse to go up.

Having said that, the road ahead will not be smooth as 5600 has in the past been a stiff resistance zone for the Nifty. So, the upside appears capped from the current levels. The upcoming EGoM on fuel prices on June 9 and the RBI mid-quarter review on June 16 will have a bearing on the market sentiment apart from the progress of the monsoon. Keep an eye on trading volumes to gauge the overall mood in the market," says Amar Ambani, Head of Research, IIFL - India Private Clients.

In global action, key Asian markets closed nearly unchanged after reports showed fall in China's manufacturing activity in May and contraction in Australia's Q1 GDP.

European equities opened static and struggled for direction with key manufacturing PMIs in the eurozone and the UK hitting multi-month lows.

The dollar fell to a three-week low against the euro amid concerns that growth in the US economy is moderating. Oil traded near the highest in three weeks.

on Wall Street, investors will watch the ADP employment report as well as data on car sales and manufacturing.