stock market update

ndices are holding on to their gains, as bulls are in no mood to loosen their grip on the market. Buyers now are turning their attention to second line shares, which are now looking undervalued relative to their large cap counterparts. GMR Infra, UCO Bank, L&T Finance Holdings, Eicher Motors and IPCA Lab are among the key gainers at this hour, up between 5-8 percent.
The Sensex soared 401.96 points to 20124.25, and the Nifty was at 6119.05, up 123.65 points.

Bulls did take a hammering on Monday, but according to Vineet Bhatnagar of Phillip Capital, it does not indicate a reversal of the recent uptrend.

United Breweries shares are off the day’s high of Rs 788, but still going strong at Rs 770, up 4 percent over their previous close.

With inflation easing, investors seem to have taken for granted another 25-basis cut in repo rates when the RBI reviews its monetary policy in June. Will the central bank be generous enough as to surprise the market with a 50 basis point-cut?

Here is what Kotak Securities has to say that:

“While it would remain the endeavor of the RBI to support growth and aim to reduce the negative output gap through its monetary-policy easing, it is still not time for the RBI to move away from its cautious communication to the market. With inflation likely to turn from September with a waning base effect, the RBI will desist from a 50 bps repo easing, at one go.”