Sensex, Nifty moved upward

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Mumbai:Benchmark indices have closed firm, amid volatile trading session, supported by strong buying among rate-sensitive sectors mainly financials and auto as the further softening in retail inflation to a four-month low of 4.87% in April gave rise to hopes of a rate-cut by the RBI.

The 30-share Sensex ended 373.62 points higher at 27,251.10 and the 50-share Nifty gained 108.50 points at 8,235.45. On the macro-economic front, the retail inflation softened further to a four-month low of 4.87% in April compared to 5.25% in March. In contrast, factory output growth slowed to a five-month low of 2.1 per cent in March as against 5 per cent registered in February which could push the Reserve Bank of India (RBI) to slash key interest rates.

On the currency front, the rupee is lingering at 64.05 per dollar, though the traders reckoned the RBI spent an addition $500 million the previous day.Moreover, HSBC downgraded Indian stocks to “underweight” from “overweight”, citing slowing earnings growth, little room for rate cuts and potential negative impact from an unusual weather due to El Nino.

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