Sensex shrugs off GDP data...Nifty above 5550

It was an outstanding trading session for the Indian stock market on Tuesday with the NSE Nifty ending above the 5550 levels, while the BSE Sensex shut shop above the 18500 levels.

After Monday’s lackluster session, the benchmark indices posted healthy gains today amid a worldwide rally in equities, and to some extent commodities as well. The Asian markets ended sharply higher and European stocks also surged. US stock futures also pointed to a higher opening later today.



The BSE Sensex ended at 18,503 adding 271 points. It had earlier touched a day's high of 18,526 and a day's low of 18,266. It opened at 18,266. The NSE Nifty closed at 5,560 adding 87 points.

The rally was led by Realty, FMCG, Banking, Metals and Pharma stocks. The smart gains today came despite lower than expected quarterly GDP numbers. The disappointing GDP data sparked speculation that the RBI may just temper its aggressive monetary stance in the growth-inflation trade off.

The GDP for Q4 FY11 stood at 7.8% as against expectations of 8.2%, At the same time, the Government revised Q3 GDP to 8.3% from 8.2% earlier. The Indian economy had expanded by 9.4% in the fourth quarter of last fiscal year.

"The GDP data clearly had a role to play in today's rally as the slowdown could prompt the RBI to be less hawkish in the coming months. But, for the RBI to take a pause we need inflation to moderate materially. That looks a little tough given that a diesel price hike is still looming large and crude is still around US$100 a barrel. So, we are still precariously poised at the macro level and it will take a while for things to improve. Monsoon’s progress would be tracked closely in this context. FII flows have improved in the past couple of days. One has to see if the trend persists in the coming days as well," says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The European markets were trading in the green, the FTSE index was up 1%, CAC index was up 1.5% and DAX index was up 2%.

Outside the index, the major gainers were Marico, Areva, GMR Infra, MOIL and Bajaj Finserve. Among the major losers were Patni, M&M Fin, Cummins India, Shree Cement and Piramal Health.