Key lending rate cut lifts equity markets

Reduction in a key lending rate, coupled with short covering and value buying, swelled the Indian equity markets on Tuesday.

The key indices which opened on a higher note following positive cues from Asian markets, held on to their gains after the Reserve Bank of India (RBI) announced a 25 basis points cut in one of its key lending rates.

Both the key equity indices provisionally closed the day's trade with appreciable gains, as healthy buying was witnessed in oil and gas, banking and metal stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) gained 31.05 points, or 0.36 per cent, to 8,769.15 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,377.64 points, provisionally closed at 28,334.55 points (at 3.30 p.m.) -- up 91.26 points, or 0.32 per cent, from the previous close at 28,243.29 points.

The Sensex touched a high of 28,404.70 points and a low of 28,242.25 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls -- with 1,684 advances and 1,151 declines.

On Monday, both the key Indian indices had soared on the back of positive global cues, coupled with value buying and higher crude oil prices.

The barometer index had gained 377.33 points, or 1.35 per cent, while the NSE Nifty surged by 126.95 points, or 1.47 per cent.