Sensex gains 56 pts ahead of RBI policy

The BSE Sensex on Monday gained 56 points as investors bought equities amid expectations of rate cut by the Reserve Bank of India (RBI) in its credit policy announcement on Tuesday.

Banking and realty stocks made gains even as inflation eased marginally, raising hopes that the central bank could offer some respite to the home loan buyers.

The 30-stock benchmark opened the day lower at 17,047.87 before settling at 17,150.95 - up 56.44 points or 0.33 per cent from Friday's close.

The National Stock Exchange (NSE) 50-stock index Nifty moved up 18.75 points or 0.36 per cent to close at 5,226.20.

Auto, capital goods and FMCG were also in demand on hopes that RBI will cut repo rates - at which it lends to banks - by 0.25 per cent, signalling an end to the tight money policy stance to revive growth.

RBI raised lending rate 13 times between March 2010 and October 2011 to tame inflation, which eased marginally to 6.89 per cent last month, from 6.95 per cent in February. It was 9.68 per cent in March last year.

Besides, sustained foreign capital inflows and higher cues from European markets boosted investor sentiment.

With PTI inputs