Sensex regains 17,000 mark, closes at 10-week high

The Bombay Stock Exchange (BSE) Sensex closed above the 17k mark to 10-week high of 17,077.18, up 81 points on sustained buying as RBI policy shifted focus to pushing growth from taming inflation, and investors settled this months derivative contracts amid strong overseas markets.

Metals, PSU, teck, auto, consumer durables and IT stocks attracted good buying, with 12 of the 13 sectoral indices making gains. Only BSE-Capital Goods finished in the red after yesterday's gains.

Firm cues from the Asian markets aided the sentiment, although weak European equities weighed down the market.

In the last five sessions, Sensex has moved up by 625.71 points or 3.80%, with FIIs - major market movers -pumping in over $1 billion so far this month.

Investor confidence got further boost yesterday after the Reserve Bank cut the cash reserve ratio (a portion of deposits banks keep with RBI) by 0.50 percentage points to 5.5% -- a move that would infuse Rs32,000 crore in the financial system, easing liquidity.

It also left lending rates unchanged, indicating that its focus would be on growth, going forward rather than taming inflation.

"Markets continued with the bullish momentum after the CRR cut by RBI yesterday, leading investors to look forward to cut in lending rates from this point on and spurring growth," said Alex Mathew, research head of Geojit BNP Paribas.

The Bombay Stock Exchange 30-share index resumed higher but moved in a narrow range before closing at 17,077.18, up 81.41 points or 0.48%.

The NSE 50-issue index Nifty also gained 30.95 points or 0.60% to end at more-than 10-week high of 5,158.30.

Globally, key indices in Japan, Singapore and South Korea gained up to 1.48%, while those in Europe were trading weak in the afternoon deals.

After selling 12.80 crore on Monday, FIIs continued buying Indian equities and picked up shares worth Rs801.29 crore yesterday as per provisional data.

Analysts said the markets moved in a narrow range as investors squared positions on the last day of the settlement in January's derivatives contracts.

Of the 30 Sensex scrips, 18 closed in the green. Coal India gained 3.90%, followed by Tata Motors (3.78 pc), Tata Steel (2.97 pc), Sterlite (2.47 pc), Maruti Suzuki (2.44 pc), Infosys (1.51 pc), HDFC (1.12 pc), Bharti Airtel (1.03 pc) and RIL (0.89 pc).

However, Tata Power fell 2.09 pc, Jindal Steel - 1.67 pc, Hero MotoCo (1.43 pc), L&T (1.35 pc), Hindalco - 1.08 pc) and ONGC - 0.98 pc.

Among the sectoral indices, BSE-metal spurted 1.79 per cent, PSU - 1.24 pc, Teck - 1.20 pc, Auto - 1.15 pc, Consumer Durables - 1.12 pc and IT by 1.06%.

The market breadth at the BSE was positive and 1,808 stocks gained ground, as against 1,040 finishing with losses. The total turnover was sharply lower at Rs2,794.96 crore from Rs4,673.08 crore.