Upbeat ahead of RBI board meet, Sensex rallies by 318 points

Mumbai: The BSE benchmark Sensex rallied over 300 points Monday to end at over a six-week high of 35,774.88 as investors widened their portfolios ahead of the RBI's board meet outcome amid foreign fund inflows.

Also, positive cues from other Asian markets and a firm opening in European shares buoyed investor sentiment here.

A crucial meet of the Reserve Bank's central board is underway amid a rift between the central bank and the government over future course of policies.

The finance ministry nominees and some independent directors were expected to take on Patel and his team over issues ranging from MSME credit to the central bank's reserves, though both sides are in favour of reaching a common ground.

Expectations of a positive outcome boosted market mood after the meeting began.

According to analysts, domestic bourses are focusing on RBI's board meet to get cues on liquidity crunch with non-banking financial companies (NBFCs) and relaxing norms for state-run banks.

The Sensex started off on a high note at 35,647.62 and continued its upward march to hit a high of 35,818.65 as buying activity gathered momentum. It finally settled 317.72 points, or 0.90 per cent, higher at 35,774.88.

This is the benchmark's highest closing since October 3 when it had closed at 35,975.63. The barometer had gained 315.17 points in the previous two sessions.