India's BSE index closed at its highest in 11 weeks on Tuesday, as hopes of aggressive rate cuts by India's central bank offset both profit-taking and global uncertainty after two explosions tore through Brussels airport on Tuesday morning killing 13 people. The benchmark BSE index rose 0.18 percent to end at 25,330.49, its highest close since January 6, clawing back from losses earlier in the day when it fell as much as 0.8 percent.
The broader NSE index gained 0.14 percent to close at 7,714.90. Losses were also sparked as Asian stocks seesawed after hawkish comments from US Federal Reserve officials clouded the country's monetary policy outlook. But overall sentiment remained supported by hopes the Reserve Bank of India would cut interest rates by as much as 50 basis points at its policy review on April 5, on the back of easing inflation and after the government stuck to its fiscal deficit target next year and slashed retail savings rate.
"If the market is letting off some steam then that's par for the course," said Dipen Sheth, head of institutional research at HDFC Securities. "There are enough reasons for the market to stay at these levels or indeed go up from here." Both the indexes had earlier hit their highest levels since January 6 and are up nearly 10 percent so far this month. Recent outperformers led the falls, with ICICI Bank down 1.1 percent though it is still up 22 percent so far this month. Hindalco fell 0.8 percent but is up 24 percent in March.
Cement companies such as Ambuja Cements and ACC fell 3 percent and 1 percent respectively, also on profit-taking. Among the gainers, Bharat Forge and Mahindra & Mahindra rose about 1 percent each after the Economic Times newspaper reported Airbus was in initial talks with the companies to have some of its aircraft parts forged in India.
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