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Sensex shrugs off weak GDP data, jumps 271 pts

Tuesday, May 31, 2011
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Mumbai: The BSE Sensex shot up 271 points to 18,503 today, as investors shrugged off slow economic growth in the fourth quarter ended March and bought across the board on firm global cues, with all sectoral indices making gains. Realty, FMCG and banking stocks were in strong demand and all the 13 sectoral indices made sharp to moderate gains. Besides, there was strong buying in heavyweights such as ITC, HDFC Bank, RIL, HDFC, SBI and L&T that pushed up Sensex. The 30-share Bombay Stock Exchange barometer opened firm and moved up to settle at 18,503.28, gaining 271.22 points or 1.49 per cent. Yesterday, it had lost over 34 points. The NSE 50-issue Nifty also spurted 87.05 points or 1.59 per cent to settle at more than 2-week high of 5,560.15. Brokers said investors bought stocks available at lower levels, and partly because they felt that RBI might be less aggressive on tightening monetary policy after the slowdown in economy in Q4. RBI has tightened key rates nine times since March, 2010 to rein in inflation, pushing up borrowing costs for corporate and slowing down growth, making investors cautious. GDP grew by a slower-than-expected 7.8 per cent during January-March, as against 9.4 per cent in corresponding period of the previous year. However, for the entire fiscal, GDP improved to 8.5 per cent, from 8.0 per cent in 2009-10. "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," said Amar Ambani, Head of Research at IIFL.
Source: PTI
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