Sensex closes above 10,000 level, realty, banking shares soar

MUMBAI: The benchmark Sensex on BSE today closed above the crucial 10,000-point level for the first time in nearly one-and-a-half month on brisk buying sparked by a sharp fall in inflation which sent interest rate sensitive realty and banking stocks soaring.

The bellwether index steadily rose, except for a brief period in the morning session, and closed with gains of 361.14 points at 10,076.43, a level last seen on November 5.

On hectic buying across the counters, all the sectoral indices closed higher, but the real estate and the banking shares stole the limelight at 7.27 per cent and 7.06 per cent respectively.

Power index was the another winner at 5.81 per cent, while PSU index also gained 5.11 per cent. IT index too closed up while the rupee posted sharp gains against the dollar.

Experts said with the rate of price rise declining sharply to a nine-month low of 6.84 per cent for the week ended December 6, the focus may now shift back to growth from taming inflation which had touched a high of 12.91 per cent (revised) in August.

Marketmen said a steep fall in inflation amid anticipation of a second stimulus package by the government to boost the economy worked like a double bonanza for investors who were already on a high after US Fed Reserve cut interest rates to almost zero, raising hopes of fresh capital inflows.

Reports of government raising the cap for tax rebate on interest paid on home loans in the second stimulus package also helped the real estate sector to post gains.

Among the Sensex stocks, DLF at 9.56 per cent was the biggest gainer with Jaiprakash Industries being at a close second at 9.36 per cent. Satyam Computers rose by 7.15 per cent after losing a massive 30 per cent yesterday.