Sensex rallies 143 pts to 30-month high of 20,302

Mumbai: Led by FMCG majors ITC and Hindustan Unilever, the sensex gained 143 points on Tuesday to a two-and-halfyear peak of 20,302. Despite economic uncertainties on several fronts and even as Dalal Street investors shifted to defensive stocks, both the FMCG majors touched all-time peaks, with ITC closing at Rs 376 and HUL at Rs 719. The day's buoyancy was also backed by strong rallies in other major markets like the US and Japan, with several of the leading indices either at multi-year or all-time high levels.      Despite the current rally, there are people in the market who are cautious because they believe that the current rally is riding on a select stock, and the muted quarterly earnings numbers do not justify such euphoria. In addition, institutional dealers pointed out that foreign funds are yet to start buying Indian stocks in a big way, and for the current rally to sustain it would need FII inflows. At the close of session, net FII buying for the day was just Rs 211 crore, according to data on the exchanges.      BSE data on Tuesday showed that of the 143-point gain for the sensex, 71 points, or almost half of the gains, came from the two FMCG majors, indicating that the gains were skewed in favour of the two index heavyweights. Apart from these stocks, the other major contributors to the index's gains were ICICI Bank, Infosys and SBI.      Market players said that with bulls firmly in charge of the Street, there is no way the market can fall till the expiration of the current month's derivatives contracts on Thursday. Since the last derivatives expiration on June 27, the benchmark indices, sensex and NSE nifty, have each gained about 7% to their current levels.      "With the nifty up over 7% since the last expiry, it appears bulls are in full control irrespective of negative fundamentals. With just two days to expiry, it is unlikely that the bulls will allow their grip on the market to lessen," said Arun Kejriwal, director, KRIS, an investment research and advisory firm. "What happens Friday onward could be another story," said Kejriwal.      Analysts are also cautious because corporate earnings for the April-June quarter again showed that India Inc was leaning heavily against other income for reporting net profit growth. The muted growth in revenues also reflected the lack of pricing power for most manufacturers, analysts said.  RBI TIGHTENS THE SCREWS  MEASURE  Banks can borrow only half percent of their deposits from RBI on any given day  Cash reserve requirement to be applied on daily basis as against average fortnightly balance earlier  RBI to drain liquidity through auction of 56-day and 28-day bonds for Rs 3,000cr each  IMPACT  Rupee could firm up as building up long positions becomes expensive  Home and auto loan rates could inch up for customers of banks that depend on wholesale funds  Bond prices to crash further, bond schemes of mutual funds will lose value