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Sensex Breaks 18,000 Level, Near 7-Mth High

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Rising for sixth straight day, Sensex on 12 September jumped 147 points to close above 18,000 level for the first time since February 23 on rising hopes that muted growth in July IIP will force RBI to cut interest rates, amid reports that Germany's top court has backed a new EU bailout fund.

The BSE benchmark index climbed 147.08 points, or 0.82 per cent to close at 18,000.03 on heavy buying in metal, auto, capital goods shares. The index had gained 541 points in last five sessions.

Industrial production growth rate slowed to just 0.1 per cent cent in July due to poor show by manufacturing, mining and capital goods sectors.

"July industrial growth came in line with our muted expectations. With growth set to slow below the RBI's 6.5 per cent forecast, we expect a 0.25 per cent CRR cut (on Monday) to soften lending rates," said Indranil Sengupta, India Economist, Bank of America Merrill Lynch.

As many as 21 stocks in Sensex closed with gains. Tata Motors which rose 5.3 per cent led the winners, followed by Jindal Steel (3.8 pc), Coal India (2.9 pc) and L&T (2.8 pc).

Brokers said the domestic market received a further boost as Asian and European shares jumped after Germany's top constitutional court allowed the country to ratify the euro-area bailout fund with certain conditions.

"German court's ruling today, affirming the implementation of Eurozone's new rescue fund and budget pact, also helped the market sentiment," said Nidhi Sarswat, Senior Research Analyst, Bonanza Portfolio.

The broad-based National Stock Exchange index Nifty closed 41 points, or 0.76 per cent higher at 5,431.

Traders said airline shares extended gains on hopes of permission to allow foreign direct investment into the sector.

Spicejet, Kingfisher and Jet Airways recorded handsome gains.

Key benchmark indices in France, UK and Germany were up by between 0.20 per cent to 0.89 per cent.

Back home, out of the 30-share sensex pack, 21 stocks finished with gains while nine ended with losses.

Other gainers from the Sensex were Tata Steel (2.68 per cent ), Wipro (2.48 per cent), Dr Reddy (2.38 per cent), Hindustan Unilever (1.52 per cent), TCS (1.50 per cent), Sterlite (1.38 per cent), HDFC Bank (1.02 per cent) and ITC (0.94 per cent).

Among losers, Cipla dropped by 2.73 per cent, followed by NTPC (2.18 per cent), Gail India (1.66 per cent), BHEL (1.64 per cent) and Hero Motocorp (0.92 per cent).

Among the sectoral indices, the BSE-Metal rose by 2.14 per cent, followed by the BSE-Auto (1.26 per cent), the BSE-Capital Goods (1.20 per cent), the BSE-IT (0.95 per cent), the BSE-Consumer Durable (0.81 per cent) and the BSE-Realty (0.81 per cent).

The BSE-Power and the BSE-Healthcare, however, declined by 0.98 per cent and 0.43 per cent respectively.

The total turnover shot up to Rs 2,412.85 crore from Rs 1,787.78 crore on 11 September. Foreign Institutional Investors (FIIs) bought shares worth a net Rs 423.59 crore yesterday as per the provisional figures from the stock exchanges.