(With agency inputs)

NEW DELHI: Equity indices on Monday clocked fresh record highs as a sharp decline in economic growth in the March quarter firmed expectations for at least a quarter-point (25 bps) rate cut from the Reserve Bank of India (RBI) on June 6.The economy grew at its slowest pace in more than four years in the January-March period, lagging China’s growth pace for the first time in nearly two years, raising the chances the central bank will cut rates for a third straight meeting.The benchmark BSE sensex surged 553 points or 1.39 per cent to register a new record closing high of 40,268, while the broader NSE Nifty scaled new closing peak of 12,089. Nifty settled 166 points or 1.39 per cent higher after crossing the 12,100-mark for the first time in the intra-day trade.Top gainers on the BSE index include Hero MotorCorp, Bajaj Auto, Asian Paints, IndusInd Bank, Hindustan Unilever and Maruti with their shares rising as much as 5.87 per cent. 27 out of 30 stocks finished in green on the sensex pack.On NSE, except for Nifty Media, all other sub-indices posted gains with Nifty Auto and FMCG rising the most, up as much as 1.87 per cent.According to traders, investors are lapping up stocks amid expectations of an interest rate cut by Reserve Bank this week.“A 25-basis-point cut is the base case that the market is expecting. Now with the GDP figures, we are also looking at something more,” a senior trader at a private bank told news agency Reuters, referring to a possible change in policy stance or a bigger rate cut.Two-thirds of 66 economists predicted that the RBI would cut its repo rate by 25 basis points at its June 4-6 meeting, bringing it to 5.75 per cent - the lowest since July 2010. It is then expected to keep policy on hold at least until the end of next year.“There are a lot of mixed cues for India; the GDP data is making a strong case for a rate cut by the RBI,” Siddhartha Khemka, head of retail research at Motilal Oswal Securities, told Reuters.Meanwhile, foreign institutional investors bought equity worth Rs 676.15 crore on Friday, and domestic institutional investors purchased shares to the tune of Rs 394.09 crore, provisional data available with stock exchanges showed.