Monsoon forecast sends India’s equity indices soaring (Third Lead)

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Mumbai, April 13 (IANS) Forecast of above average monsoon rains, along with healthy expansion in industrial production and a decline in retail inflation, sent the Indian equity markets soaring on Wednesday.

Further, positive global indices and a rise in crude oil prices unleashed fresh buying of equities. Consequently, the key indices continued to zoom during the late-afternoon trade session.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) traded higher by 135.80 points, or 1.76 percent, at 7,844.75 points.

Similarly, the barometer 30-scrip sensitive index (Sensex) of the BSE made healthy gains. It opened at 25,358.42 points, traded at 25,611.28 points (at 2.30 p.m.) — up 466 points or 1.85 percent from the previous close at 25,145.59 points.

The Sensex touched a high of 25,615.42 points and a low of 25,358.42 points during the intra-day trade.

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The BSE market breadth was tilted in favour of bulls – with 1,642 advances and 959 declines.

Both the indices had ended the previous two sessions on a higher note. On Tuesday, while the Sensex was up 123.43 points or 0.49 percent, Nifty edged up 37.55 points, or 0.49 percent.

On Monday, the Sensex rose 348.32 points, or 1.41 percent, and the Nifty was up 116.20 points or 1.54 percent.

Initially on Wednesday, both the key indices opened on a firm note, in-sync with their Asian peers, rise in crude oil prices and healthy macro-economic data.

According to market analysts, fresh buying was witnessed on the back of IMD’s (India Meteorological Department) forecast of above-average monsoon rains on account of receding El Nino conditions. IMD’s predictions on monsoon came during the trading hours on Tuesday.

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The IMD said that after two straight years of drought, India is likely to be showered with above average rains during the upcoming monsoon season, with a probability of more than 94 percent precipitation.

Then, after the closing bell on Tuesday, came the twin dose of positive news from the Central Statistics Office that India’s factory output for February logged a growth of two percent after three straight months of decline, and annual retail inflation fell to 4.83 percent in March from 5.26 percent in February.

Besides, rising global crude oil prices and positive global markets cheered investors’ sentiments.

Notwithstanding, gains were capped by unwinding of long positions ahead of the extended weekend.

The equity markets will be closed on account of Ambedkar Jayanti on April 14 and Ram Navami on April 15.

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Even, the caution over the ongoing Q4 (fourth quarter) results season which started from April 8 mildly dampened sentiments. Infosys is expected to be the first bluechip firm to come out with its results on April 15.

“Several positive factors like forecast of above-average rains, healthy expansion of industrial production and a decline in retail inflation have acted as triggers for the equity markets’ rise today,” Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

“Even positive global indices and rising crude oil prices supported the markets’ rise.”

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