The BSE benchmark index, which had gained 1,153 points in last eight sessions, advanced today by 78.04 points, or 0.42 per cent, to close at 18,542.31, a level last seen on July 26 last year. With Sensex rising for nine straight sessions, this is the index's longest gaining trend since October 2007.
In early trade, the Sensex touched day's high of 18,715.03 but trimmed some of the 250-point gain after Reserve Bank kept lending rates unchanged in view of risks from inflation and twin deficits, but cut Cash Reserve Ratio by 0.25 per cent to release Rs 17,000 crore of primary liquidity into the system.
Brokers said rate-sensitive shares like realty, banking and auto sector attracted buying as RBI indicated it may cut rates later if inflationary pressures subside. Capital goods, power, metal and refinery also saw demand.
In the 30-share Sensex, 18 stocks gained led by Reliance Industries, State Bank of India, L&T, BHEL, Hero MotoCorp, ICICI Bank and Jindal Steel.
The 50-share NSE index Nifty rose by 32.35 points, or 0.58 per cent 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 on back of further policy announcements made by the government last Friday. The RBI responded to these initiatives by reducing CRR by 0.25 per cent," said Dipen Shah, Head Fundamental Research, Kotak Securities.
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