Sensex closes above 17,000

The Indian stock exchanges rose to their highest in six weeks after the monthly industrial production index showed the highest rise in two years.

The Bombay Stock Exchange Sensitive Index, or Sensex, opened on a firm note at 16,687.32 on the back of moderate opening of Asian markets. The index remained firm after data showed a surge in industrial production. The IIP (Index of Industrial Production) for August 2009 rose 10.4 per cent as against 6.89 per cent in the previous month.

A strong response to the initial public offer of Indiabulls Power, fully bid within half an hour of opening of the issue, also lifted sentiment.

The benchmark index soared to a high of 17,068.78, thus managing to break the psychological barrier in mid-afternoon trades, tracking positive cues from European markets and higher US index futures.

The Sensex closed at 17,026.67, up 384 points, or 2.31 per cent. The CNX Nifty crossed the 5,000 level and zoomed to a high of 5,068.05. The index finally settled at 5,054.25, up 109 points, or 2.21 per cent.

Among the BSE 30 stocks, State Bank of India and Reliance Infrastructure soared 5 per cent each. Information Technology stocks gained on a weak rupee — Wipro (3.79 per cent), ITC (3.74 per cent), TCS (3.36 per cent) and Infosys (2.82 per cent).

“Oil stocks drove markets today,” said Gul Tekchandani, an investment consultant. He said the present market looks tired and might correct by 10-20 per cent. Hotel, textiles and chemicals are the three sectors which Tekchandani advises can be look forward to.

Out of 2,829 shares traded, 1,627 advanced, 1,108 fell and 94 were unchanged on the BSE.