Sensex rises above 21,000 for first time since Nov 2010

By Abhishek Vishnoi

MUMBAI (Reuters) - The BSE Sensex reached the key level of 21,000 on Thursday for the first time in nearly three years, on better-than-expected corporate earning trends and continued strong inflows from foreign funds.

The benchmark BSE Sensex touched 21,039.42 before slipping back. The last time it was above 21,000 was on November 8, 2010. The index's all-time high is 21,206.77, hit in January 2008.

India was the best performing market in Asia on Thursday, with shares up 0.9 percent at 1127 am. Shares have been benefited from a return of global risk appetite as poor U.S. data has pushed back expectations of any tapering of the Federal Reserve's monetary stimulus until 2014.

 

Foreign investors have continued to buy local shares, remaining net buyers for a 14th consecutive session. Provisional exchange data showed a net purchase of 6.44 billion rupees on Wednesday, bringing the total to about 117.34 billion rupees during that period.

Major corporates such Infosys Ltd. and Larsen & Toubro have reported better than expected earnings in the September quarter, helped by improved export earnings.

"This is fatigue of pessimism. My sense is that we will see a new high soon as all dips are being bought into due to prevailing liquidity," said Paras Adenwala, managing director and principal portfolio manager at Capital Portfolio Advisors.

The focus is now on the central bank's policy review on October 29, at which it is expected to raise its key rate by 25 basis points. Five key states are also slated to go for elections in November and December, ahead of general elections due by May.

The broader NSE index <.NSEI> rose as much as 1.2 percent on Thursday to mark its highest intraday level

Among blue chip shares, ITC Ltd gained 1.8 percent while Reliance Industries Ltd rose 1.1 percent.

Rate sensitive stocks including banks and autos were also rising ahead of the Reserve Bank of India policy review next week.

HDFC Bank Ltd rose 1.4 percent while ICICI bank Ltd gained 1.1 percent.

Tata Motors Ltd climbed 2.5 percent and Maruti Suzuki Ltd 1.1 percent.

Shares in India's Jet Airways fell 3.3 percent after the company reported its worst quarterly loss on Wednesday, squeezed by high fuel costs and a weaker local currency.

Ambuja Cements Ltd fell 1.4 percent and ACC Ltd lost 0.5 percent after the cement makers reported lower than expected July-September earnings.

(Additional reporting by Swati Bhat; Editing by Richard Borsuk)