Mumbai: The BSE benchmark Sensex gained for the second consecutive week by adding another 231 points on expectations the Reserve Bank of India (RBI) will cut interest rates at its June 18 mid-quarter monetary

policy review to prop up a slowing economy.   Industrial production in

April rose by a dismal 0.1% from a year earlier as manufacturing output remained weak and mining output shrank, deepening worries of a slowdown in the economy.

Global rating agency Standard & Poor’s warned India could become the first BRIC nation to lose its investment-grade rating if the South Asian country doesn’t revive its growth and push the pedal on reforms.

Inflation moved up to 7.55% in May from 7.23% in April because of spurt in prices of potato, pulses and wheat, although onion and fruits showed a declining trend.

The BSE barometer rose by 230.96 points, or 1.38% , to 16,949.83. The 50-unit S&P CNX Nifty of NSE also firmed up by 70.70 points, or 1.39%, to 5,139.05.

Key benchmark indices surged at the tail-end of the week as stocks rose across the globe on reports central banks of major economies are ready to provide liquidity, if needed, after crucial elections in Greek on June 17. The vote is expected to determine the Greece’s future in the euro-zone. Among the 30 Sensex shares, 17 shares rose and the rest declined.

Despite several negative developments on economic front in the week, the market gained as traders pinned hopes on the apex bank to cut key rates, analysts said.

Kishor Ostwal, CMD of CNI Research Ltd, said even though inflation number disappointed, the Sensex and Nifty rose on expectations of a cut in CRR and repo rate.

RBI is meeting on Monday to discuss policy matters and the Street is expecting CRR cut by 25 bps and possibly 25 bps repo rate cut.

Despite higher-than-expected cut in repo rate by RBI in April and rise in petrol prices, inflation was not that high, which suggests that inflation can only fall from hereon and hence the apex bank can justify another rate cut. A cut should infuse much required confidence among traders, he added.

FMCG major Hindustan Unilever (HUL) was the top Sensex gainer. The stock jumped 5.08% to Rs. 450.10. India’s largest cigarette maker by sales ITC rose 3.50% to Rs. 248.10.

India’s second-largest software exporter by revenue Infosys gained 4.17% to Rs. 2520.05. India’s largest IT company by revenue TCS rose 3.27% to Rs. 1271.45.

India’s largest listed telecom operator by sales Bharti Airtel rose 2.65% to Rs.311.90. Telecom stocks gained on reports the Reserve Bank has approved the proposal to allow mobile phone companies to mortgage spectrum, a move that will allow telcos to use radio waves as collateral and raise funds from banks for the upcoming auctions.

Other gainers from the Sensex pack were Hindalco (2.58 %), ONGC (2.51%), ICICI Bank (1.98%), Sun Pharma (1.78%), HDFC Bank (1.77%), M&M (1.39%) and Larsen & Toubro (1.32%).

Among the losers NTPC fell 3.63% , Dr Reddy’s Laboratories (2.87%), Maruti Suzuki (1.47%) HDFC (1.37%), Wipro (1.38%) and BHEL (1.20%).

Among the major indices, the BSE-FMCG rose by 3.38% followed by the BSE-IT 2.64%, the BSE-TECK 2.31 %, the BSE-Consumer Durable 1.49% and the BSE-PSU gained 1.09%. However, the BSE-Realty fell by 1.70%.

The total turnover at BSE and NSE declined to Rs.9,524.07 crore and Rs.46,783.59 crore, respectively from the last weekend’s level of Rs.9,784.42 crs and Rs.49,613.00 crore.