Sensex above 10k, rate cut eyed

Banks, automobiles and property stocks were also in demand after data on Thursday showed inflation dropped below 7 per cent for the first time in nine months, strengthening expectations for a rate cut.

8220;We are heading for a regime of lower interest rates and low inflation, and a positive momentum is emerging in the system,8221; said Deven Choksey, managing director at K R Choksey Shares 038; Securities.

The 30-share BSE index ended up 0.23 per cent, or 23.48 points, at 10,099.91, after initially falling nearly 1 per cent and then rising 1.1 per cent.

The benchmark, which had closed above 10,000 for the first time in five weeks on Thursday, gained 4.2 per cent on the week, its second in a row.

Eighteen of its components rose, while in the broader market advances led declines in the ratio of 1.4:1 on heavy volume of 418.9 million shares.

8220;The market is gradually trying to distinguish the better stocks from the rest. We have also seen profit booking at every rise. These are positive indicators for the health of the market,8221; Choksey said.

Autos, which have been beaten down sharply on falling demand, rose on hopes lower rates and falling oil prices would bring buyers back.

Top car maker Maruti Suzuki gained 2.5 per cent to 549.55 rupees, while leading truck maker Tata Motors added 3.3 per cent to 179.30 rupees. Tractor and utility vehicle maker Mahindra 038; Mahindra firmed 4.2 per cent to 321.20 rupees.

DLF, the country8217;s biggest listed developer, rallied 10.8 per cent to 307.35 rupees as investors betted cut in interest rates would help revive demand.

Bharti Airtel gained 1.6 per cent to 721.55 rupees and firmed 0.9 per cent to 818.65.

State-run oil marketing firms rose as crude prices slumped to 4-frac12; year lows of around 36 a barrel, which should help their profit margins that had earlier taken a hit from high global prices and lower government-set fuel prices.

Indian Oil Corp rose 3.9 per cent to 421.40 rupees, Hindustan Petroleum Corp firmed 1.9 per cent to 276.20 rupees and Bharat Petroleum Corp added 4.5 per cent to 385.15 rupees.

But energy giant Reliance Industries fell 0.8 per cent to 1,349.25 rupees, as investors worried over impact of low crude prices on the firm8217;s refining margins.

State-run explorer Oil and Natural Gas Corp fell 3.2 per cent to 709.15 rupees, weighed by concerns it would have to push through with its now-expensive takeover of UK-listed Imperial Energy. ONGC had agreed to a price of 1,250 pence a share, when crude was around 130 a barrel.