Reserve Bank Governor Raghuram Rajan is widely expected to hold the key rates citing high inflation at the fourth bi-monthly monetary policy announcement on Tuesday, even though the pro-growth lobby has been wishing for a rate cut.
This is the BJP's first full-year Budget.
The 30-share Sensex jumped 729 points to end at 28,076 and the 50-share Nifty soared 217 points to end at 8,494.
Market breadth was weak with 1,260 advances and 1,597 losers on the BSE.
The Sensex was up 70 points and the Nifty was up 20 points led by SBI on robust Q2 earnings.
Though inflation, on the basis of the wholesale price index, is nowhere near the 1990-91 level of 10.26 per cent and India is in a much better position to check it, the greater integration of our economy with the globe has exposed it to a much higher risk of imported inflation.
Fresh investments are constrained by tepid demand.
Movement of rupee and crude oil prices will also dictate the trend
We are entering a period of turbulence, but you can profit off that volatility.
The new IIP numbers should spread cheer among those who were part of the Manmohan Singh-led United Progressive Alliance, earlier accused of having presided over a steady deterioration in industrial performance, particularly in the last two years of its tenure, says A K Bhattacharya.
The long-term growth perspective or potential for India is one of the highest in the Asia Pacific region.
The market breadth ended weak on the BSE with 2,086 shares declining and 893 shares advancing.
Shares of rate sensitive sectors such as realty, infrastructure, banking and automobiles ended higher ahead of the Reserve Bank of India (RBI) mid-quarter policy review on June 17.
The 30-share Sensex ended down 35 points at 26,349 and the 50-share Nifty ended down 20 points at 7,864.
It is pegged at 6.8-8% by various economists, as compared to 6.7%.
The muted CPI inflation print at 5% earlier this week, followed by a similar WPI number released Wednesday, seems to have spurred India's central bank into action, is how the economists are reading into Reserve Bank of India governor Raghuram Rajan's 25 basis point cut in repo rate.
The govt would also be coming out with more measures to deal with inflation.
Addressing bankers and economists at Bancon 2013, a flagship event of the Indian Banks' Association, Chidambaram told the lenders to deal firmly with wilful defaulters, but handhold those who are reeling under the impact of the economic slowdown.
He said the UPA had left the economy in a dire state, with Consumer Price Index and food inflation at double digit, Wholesale Price Index inflation around 6-7 per cent and growth prospects were limited.
Finance Minister Arun Jaitley said the inflation index would determine the nominal growth figure, and it is better to set modest targets and outperform them.
Chief economic advisor Arvind Subramanian discusses the Budget, goods and services tax, Centre-state relationship and larger issues facing the economy
