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Sensex up for 9th day, touches 14 month high

business Updated: Sep 17, 2012 17:40 IST

Rising for ninth straight day, the Sensex on Monday gained 78 points climbing a fresh 14 month high on buying in capital goods, banks and power shares with RBI cutting cash reserve ratio by 0.25% after government last week opted for big-bang economic reforms.

The BSE benchmark index, which had gained 1,153 points in last eight sessions, advanced further by 78.04 points, or 0.42% to 18,542.31, a level last seen on July 26 in 2011.

This is the longest gaining trend logged by the index since October 2007.

In early trade, the Sensex touched day's high of 18,715.03 before trimming gains on profit-booking as Reserve Bank kept key lending rate unchanged notwithstanding rising hopes of a cut in interest rates.

In the 30-share Sensex, 18 stocks gained led by Reliance Industries, State Bank of India, Larsen and Toubro, BHEL, Hero MotoCorp, ICICI Bank and Jindal Steel.

The 50-share NSE index Nifty rose by 32.35 points, or 0.58% to 5,610, after touching a high of 5,652.20.

Brokers said market participants cheered the government decisions to accelerate economic reforms by allowing FDI in organised retail and aviation among others.

"Markets rose today on the back of further policy announcements made by the government last Friday. FDI in multi-brand retail and aviation, apart from sub-segments of media and in power exchanges were welcomed. The RBI responded to these initiatives by reducing CRR by 0.25%," said Dipen Shah, head of fundamental research, Kotak Securities.

The Sensex had rallied nearly 4% last week aided by the US Fed announcement of a third round of stimulus measures and increase in diesel prices to reduce the government subsidy burden, analysts said.

Across BSE sectoral indices, the Realty index gained the most by rising 6.21%, followed by Capital Goods (3.74%), Bankex (3.24%), Power (2.19%).

Bucking the firm trend, the Information Technology sector stocks declined as strengthening rupee against the dollar raised worries about the impact on overseas earnings.