Global cues lift Sensex 92 pts as RBI holds rates again

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Shrugging off initial disappointment, Sensex on Tuesday made a smart comeback and closed over 92 points higher led by oil&gas and IT stocks amid strong global trends even as RBI kept policy rates unchanged.

After a positive start, the BSE benchmark index declined to day's low of 17,004.09 - nearly 140 points down from on Monday's close - soon after Reserve Bank left key interest rates unchanged at its first quarter policy review.

However, the 30-share index bounced back by nearly 200 points from the day's nadir with buying emerging in 17 stocks including Reliance, ONGC, Sterlite, Tata Motors and Wipro.

Gaining for the third straight day, the Sensex closed higher by 92.50 points, or 0.54 per cent to 17,236.18, its highest closing since July 19.

Likweise, the 50-share NSE index Nifty rose by 29.20 points to 5,229, after dipping to 5,154.05 during the day.

Shares in consumer durables and banking sector were hit. Bharti Airtel was the biggest loser today shedding 2.77 per cent on reports of equity raising plans.

SBI, Hero MotoCorp and Jindal Steel lost one per cent each.

Brokers said RBI policy stance was on expected lines but the domestic market revived in sync with global stocks.

"As against the market expectations, the RBI has cut the SLR from 24 per cent to 23 per cent...All other key rates has been kept unchanged. Globally, expectations have arisen that the ECB would do something along with an expected rate cut," said Vivek Mahajan, Head of Research, Aditya Birla Money.

A rally in the Asian region and higher opening in Europe on speculation the Federal Reserve and the European Central Bank may signal their readiness to stimulate growth amid signs of a global economic slowdown helped sentiment.

After a gap of three years, the Reserve Bank of India (RBI) in mid-April had cut the short term lending rate.