Reforms and hopes of future rate cuts buoy markets

Mumbai: Reforms coupled with a dovish stand taken by the country's central bank over future rate cuts drove the Indian equity markets higher with a barometer index gaining 68 points or 0.26 percent during the early afternoon trade session on Tuesday.

Initially, both the bellwether indices of the Indian equity markets opened on a positive note following Monday's late night reforms initiated by the finance ministry in accordance with market regulator and the Reserve Bank of India (RBI).

Even a modest growth in the gross domestic product (GDP) for the second quarter, which showed a gradual recovery in the country's economy, cheered the markets.

However, the gains were capped after a slowdown in demand was indicated by a lackluster eight core industries (ECI) and purchasing managers index (PMI) data.

Nevertheless, investors kept an optimistic outlook with the RBI announcing that it will maintain an accommodative stand on future rate cuts and that the economy is eventually limping towards a marked recovery.

The barometer sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) rose by 68 points or 0.26 percent during the early afternoon trade session.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) also made modest gains. It was higher by 30.45 points or 0.38 percent at 7,965.70 points.

The Sensex of the BSE, which opened at 26,201.27 points, was trading at 26,213.91 points (at 12.35 p.m.), up 68.24 points or 0.26 percent from the previous day's close at 26,145.67 points.

The Sensex has touched a high of 26,246.02 points and a low of 26,121.52 points in the intra-day trade.