Sensex rises 75.7 pts to six-month high

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SummaryThe Sensex on Tuesday closed at over 6-month high of 17,848.57 by gaining 75.73 points as inflation fell to 2-year...

The Sensex on Tuesday closed at over 6-month high of 17,848.57 by gaining 75.73 points as inflation fell to 2-year low, raising investor hopes that RBI may begin to cut lending rates, although overall trading was low key and global markets displayed mixed trend.

Investors picked up interest-rate sensitive stocks from realty, auto and banking sectors. The capital goods segment attracted strong buying as well and the sectoral index gained 2.30%. Analysts said that fall in January inflation to 6.55%, lowest since December 2009, may prompt the Reserve Bank to ease tight monetary policy stance and reduce lending rates. Inflation was 7.47% in December, 2011.

Finance minister Pranab Mukherjee cautioned, however, that the rate of price rise was still not at an acceptable level and should fall further. Globally, Asian as well as European stock markets were mixed as Moody's cut debt ratings of Italy, Spain and Portugal and put France, Britain and Austria on warning, saying they were increasingly vulnerable to the euro-zone crisis. The NSE 50-stock index Nifty gained 25.85 points or 0.48% at more-than 6-month high of 5,416.05. FIIs, meanwhile, continue to invest in Indian equities and bought shares worth R 647.60 crore on Monday, taking their total inflow to R20,892.60 crore this year.

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