Sensex Up 260 pts On Firm Global Trend Despite Low GDP Numbers

Mumbai: The BSE Sensex shot up 260 points to 16,676.75 today, as investors ignored weak economic growth numbers and bought stocks at lower levels in line with strong trend in overseas markets as US consumer spending data ignited hopes of global economic recovery.

There was strong buying by foreign funds in metals, realty, banking and IT, even as the data released today showed that India's GDP growth slowed to 7.7 per cent in April-June quarter, from 8.8 per cent in the same quarter last fiscal.

RIL and Infosys, with over 20 per cent weight on the Sensex, 3.64 percent and 1.96 percent respectively, pushing up the market.

The Bombay Stock Exchange 30-share index, Sensex, which gained 567.50 yesterday, rose 260.42 points or 1.59 per cent to 16,676.75. Intra-day, it touched a high of 16,714.70.

Similarly, the broad-based National Stock Exchange index Nifty rose 81.40 points or 1.65 percent to close above the 5k level at 5,001.

Analysts said that despite the government terming the GDP growth as "disappointing", investors bought on strong cues from global markets.

They said investor confidence improved considerably after US consumer spending increased 0.8 per cent in July, the most since February. This pushed up major markets worldwide.

"Overnight positive closings in American markets lifted buying sentiment in Asian markets. US markets were buoyed by reports of largest increase in consumer spending in 5 months, which helped improve sentiment towards global recovery," said Shanu Goes, Senior Research Analyst at Bonanza Portfolio.

Brokers said short-coverings ahead of two holidays also led to the gains.