Mumbai: The stock market was closed on Wednesday on account of Eid-ul-Fitr, which is celebrated by Muslims to mark the end of the Islamic holy month of Ramzan. The trading will resume on Thursday when the Reserve Bank of India (RBI) will announce its key decision on interest rates later this week.
A day earlier, the BSE S&P Sensex had closed 184 points down from its previous close at 40,084 while the Nifty 50 lost 67 points to 12,022. The slowdown in economy during January to March quarter has raised prospects of a rate cut by RBI. With inflation subdued at 2.92 per cent in April -- well below the RBI's medium-term target of 4 per cent -- investors hope the central bank can cut repo rate by 50 basis points to encourage private investments and consumer spending.
Many economists and officials expect the new government to push long-pending reforms in the next parliamentary session beginning on June 17 after a landslide election victory of Prime Minister Narendra Modi-led National Democratic Alliance.
Meanwhile, Asian shares tracked Wall Street's rally on Wednesday after the US central bank comments pointed to increasing prospects of an interest rate cut.
The development boosted investor sentiment. Japan's Nikkei climbed nearly 2 per cent and Chinese shares also rebounded. Hong Kong's Hang Seng too advanced over half a per cent.
Reports quoted Chinese President Xi Jinping as saying the country's economy is stable, healthy and well placed to meet all risks and challenges.