Sensex Rises 1% on new years' 1st day

The year 2009 commenced on a promising note as the Bombay Stock Exchange benchmark Sensex on Thursday surged over 256 points on heavy buying by funds on falling inflation data and expectations of another stimulus package from the government.

The 30-share BSE Sensex gained 256.15, or 2.66 per cent, at 9,903.46, as traders started buying for the new year, buoyed by hopes of an economic package and rate cuts, after it slumped more than half in 2008 -- its worst annual fall.

The key index touched the day's high of 9,921.70 and a low of 9,711.64 with some investors offloading shares on fears that the market boosters might not give a sharp turnaround to the economy amid dismal corporate earnings and the global economic downturn and financial market turmoil.

The 50-share National Stock Exchange benchmark Nifty oscillated between 3,039.25 and 2,963.30 before ending with a gain of 74.30 points at 3,033.45.

Marketmen said the inflation rate falling to a 10-month low at 6.38 per cent and the prospect of another stimulus package and the RBI's rate cuts boosted trading sentiment.

They said general investors are still not confident of joining the rally, and are offloading.

The realty sector index gained the most, by 6.52 per cent, to 2,422.43 on the expectation of another round of interest rate cuts. The metal sector index was the second-best performer, rising 6.02 per cent at 5,528.38, influenced by a rally at the London Metal Exchange last evening.