Sensex rises on RBI-speak, telecom stocks

Fear of rising inflation dragged the Sensex into the red at the beginning of the trading day. However, Reserve Bank of India governor D Subbarao's positive comments perked investor sentiments in noon trades. 

The Sensex, after moving between 17,107 and 17,231.05, ended with a gain of 64.09 points (0.37 per cent) at 17,189.31. The NSE Nifty added 22.65 points to 5,134.65. 

Soaring prices of certain vegetables pushed the annual rate of food inflation to 19.05 per cent for the week ended November 28. Prices of essential commodities had gone up by 11 to 12 per cent. However, inflation figures could not dampen the mood when Subbarao said capital inflows into the country were in line with requirements. He further added there were no concern of asset price bubbles in the near future. 

Overnight gains in US markets helped. The Dow added 0.5 per cent, to 10,337.05. he Nasdaq was up 0.49 per cent, at 2,183.74. The BSE consumer goods index gained the most among all sectoral indices and was up 1.63 per cent. The bankex, power and PSU indices also moved up. 

Index heavyweights ICICI Bank and Larsen & Toubro contributed to the Sensex's recovery. ICICI Bank added 2.45 per cent to Rs 876.25, while L&T moved up 1.95 per cent to 1,686.55. 

Telecom stocks jumped after the government allowed foreign borrowing for the 3G spectrum. Bharti Airtel surged 3.4 per cent following this. Reliance Communication added 2.15 per cent. 

Satyam Computers rallied 5.26 per cent after agreeing to settle a lawsuit with Upaid for $70 million. Fortis Healthcare jumped on news of their entering talks to buy a Lanka hospital chain. Shopper's Stop advanced 2.6 per cent on a bulk deal with Reliance Mutual Fund.