Mumbai : Staging a late recovery, the Sensex on Monday shook off its initial weakness and ended higher by 118 points at 26,349 as bets stacked up in anticipation of a rate cut at RBI’s policy review on Wednesday. The Nifty too regained the key 8,100 mark at the close.
The monetary policy committee (MPC) is meeting tomorrow to decide on the interest rate and the final announcement is due on Wednesday. On the global front, Europe took in its stride a ‘no’ vote to the constitutional referendum in Italy and opened positive, which provided the momentum here. The 30-share Sensex after shuttling between 26,390.80 and 26,125.35 settled higher by 118.44 points, or 0.45 per cent, at 26,349.10. The gauge had lost 422 points in the previous two sessions on foreign fund outflows amid weak global cues.
The NSE Nifty ended up by 41.95 points, or 0.52 per cent, at 8,128.75 after moving in a range of 8,141.90 to 8,056.85.
The rate cut prospects brightened after the sharpest contraction in services PMI in three years opened up room for RBI to lower rates. A better trend in European shares lifted mood.
“With rate cut expectations running high ahead of RBI meet this week, risk appetite improved, especially in rate sensitive stocks forcing short covering. Sentiment was also helped by European markets swinging higher after Italian referendum,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.
