Sensex advances for second day; shoots up 358 points

Mumbai, Feb 3 (PTI)Shrugging off spike in food inflationand high interest rate worries, the BSE benchmark Sensex todaysurged by over 358 points to close at 18,449.31 on aggressivevalue buying in the recently beaten stocks and indications ofa steady global economic recovery.

The Bombay Stock Exchange benchmark Sensex, which hadgained 68 points in the previous session, spurted by 358.69points to 18,449.31, even as the food inflation soared to over17 per cent for the week ended January 22 from 15.57 per centin the previous week.

The Sensex upsurge was mostly supported by most beatenstocks of metal, realty, capital goods and banking, followingnearly 11 per cent fall in the market this year, which hadtouched a five-month low.

The broad-based National Stock Exchange index Nifty shotup by 94.75 points to 5,526.75 led by Hindalco, RelianceIndustries, Larsen and Toubro and State Bank of India.

US manufacturing data showed unexpected acceleration inJanuary, the fastest pace in more than six years, signallingthat the global recovery might be taking a strong hold.

European manufacturing too gained at the quickest pace innine months, while UK production increased at a record pace inJanuary.

Hindalco, the biggest aluminium producer, gained for thefourth day as manufacturing improved from China to the US,boosting the demand outlook. The stock gained 4.62 per cent toRs 245.70 as copper advanced to records in London and NewYork, while aluminium gained by 0.4 per cent.

Foreign funds shifted focus to Indian stocks as most ofthe Asian markets were closed on account of Lunar New Yearholidays.

The two heaviest-weighted on the Sensex - RelianceIndustries and Infosys gained on buying at attractive lowlevels and favourable reports.

RIL gained 2.40 per cent to Rs 943.50 following a steeprise in crude oil prices and Infosys rose by 0.98 per cent toRs 3,115.85 on expectations of better earnings on expectationof a steady global economic recovery. US and Europe accountfor substantial share of the revenues for Indian IT firms.

The realty sector index gained the most by rising 3.93per cent to 2,276 followed by capital goods index by 2.51 percent to 13,390.47. The metal index rose by 2.19 per cent to16,477.32 and banking index by 2.04 per cent to 12,111.66.

With the buying activity spilling over a wide-front,smallcap index rose by 1.21 per cent to 8,464 and midcap indexby 1.09 per cent to 6,827.87.