Sensex up over 500 points on day after Budget; rate cut hopes bring cheer

A day after suffering losses following the presentation of the Union Budget, the benchmark Sensex bounced back by over 436 points on Tuesday, bolstered by renewed hopes of a rate cut by the Reserve Bank amid positive Asian cues.

With the Budget out of the way, the focus now shifts to RBI Governor Raghuram Rajan's monetary policy action to revive investment and growth.
The 30-share index rebounded by 436.23 points, or 1.89%, to 23,438.23 on heavy buying.

At 1108 hours, 23,528.20, up 526.20 points or 2.29% higher. 

While foreign institutional investors took to selling, domestic financial institutions stuck to buying, helping the benchmark indices recover.

Proposals for higher spending in infrastructure and allocation of nearly Rs 36,000 crore for the farm sector and a higher credit target aimed at doubling farmers' income in five years helped improve sentiment, brokers said.

Hong Kong's Hang Seng rose by 0.54% while Shanghai Composite jumped 0.40% in early trade. Japan's Nikkei shed 0.69%.

The US Dow Jones Industrial Average ended 0.74% down in Monday's trade.