Sensex closes above 10,000 level | business | Hindustan Times
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Sensex closes above 10,000 level

business Updated: Dec 18, 2008 20:54 IST

The benchmark Sensex on BSE on Thursday closed above the crucial 10,000-point level for the first time in six weeks on buying sparked by a sharp fall in inflation which fuelled hopes of cut in lending rates amid anticipation of a second stimulus package to boost the economy.

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

Interest rate sensitive realty and banking shares soared 7.27 per cent and 7.06 per cent respectively on expectations of lending rates coming down.

Experts said with the rate of price rise declining sharply to nine-month low of 6.84 per cent for the week ended December 6, the focus may shift to back growth from taming high inflation.

The wide-based National Stock Exchange index Nifty also shot up by 106.40 points at 3060.75.

Marketmen said the fall in inflation was greater than expected. They said buying got further momentum at the fag-end after the finance ministry said that falling inflation rate would result in further lowering of interest rates.

Reports of government raising the cap for tax rebate on interest paid on home loans in the second stimulus package made realty stocks attractive.

Easing global oil prices, which fell below USD 40 a barrel for the first time since 2004 despite OPEC's decision to cut production by 2.2 million barrels a day, also boosted the market sentiment.

Asian indices ended higher by about 0.2-2.0 per cent, while European markets were trading in the green in the initial part of their session.

The market breadth turned positive as 1,490 counters ended with gains, while 966 finished with losses on the BSE. The trading volume improved further to Rs 5,095.54 crore from Rs 4,893.61 yesterday. RIL topped the list of highest traded securities with a turnover of Rs 469.11 crore followed by HDIL (Rs 249.26 crore), SBI (Rs 234.65 crore), Satyam Computer (Rs 229.59 crore) and DLF (Rs 227.40 crore).