Buttressed by positive global cues, the BSE Sensex rose 192 points to
close above the 16,500-mark on Thursday amid sustained buying in blue-chips led by
Reliance Industries (RIL) as news of
sustained deflation in food prices raised hopes that the central bank will keep
key interest rates stable.
The 30-share Bombay Stock Exchange index rose 192.27 points, or 1.17 per cent, to 16,643.74. During the course of the day's trade, Sensex hit an intra-day peak of 16,662.06.
About 23 components of the index closed higher amid positive news from global markets.
In a similar fashion, the broad-based National Stock Exchange index rose 62.60 points, or 1.26 per cent, to cross the psychological 5,000-mark and end the session at 5,018.40.
The investor sentiment got a boost from the release of data showing food inflation was (-)0.42 per cent for the week ended January 7, slightly up from (-)2.90 per cent in the previous week. While the Reserve Bank of India (RBI) is unlikely to cut key interest rates in the near-term, according to experts, the decline in food inflation reduces the possibility of a further hike in the rates.
The Sensex lost 25 per cent in 2011 as a series of rate hikes by RBI to curb inflation crimped spending and hit corporate earnings.
News that the International Monetary Fund is looking to boost its resources to deal with the fallout of the euro zone debt crisis also buttressed investor confidence.
Asian shares rose to a two-month high and bourses in Europe opened on a strong note in Europe on the back of the positive development.
Stocks of Mukesh Ambani-led Reliance Industries and Anil Ambani-led Reliance
Anil Dhirubhai Ambani Group companies attracted a lot of attention in the bullish market.
The most-weighted firm on the Sensex, RIL, gained 1.06 per cent to Rs 786.15 as investors continued to bank on reports that the company plans to go for a share buy-back.
Furthermore, Reliance Capital rose by 3.71 per cent to Rs 329.65, RCom by 3.33 per cent to Rs 91.55, Reliance Power by 2.58 per cent to Rs 93.40, Reliance Infrastructure by 3.73 per cent to Rs 448.60 and Reliance Media by 0.93 per cent to Rs 87.15.
The realty sector index was the biggest gainer in Thursday's trade - rising by 3.54 per cent to 1,695.89 - followed by the metal index, which rose by 2.81 per cent to 11,233.97. In addition, the power index rose by 2.43 per cent to 2,056.26 and the banking index by 1.85 per cent to 10,542.14.
- With PTI inputs
Sensex was trading up on funds buying propelled by hopes of better quarterly results and firm Asian cues. 
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