The BSE benchmark Sensex today rose by a modest 35 points, after a fall in food inflation boosted investor sentiment, even as the most valued company RIL lost for the second day in succession.

The 30-share barometer of the Bombay Stock Exchange ended at 34.63 points, or 0.19 per cent higher at 17,992 points. The National Stock Exchange’s wide-based Nifty index too added 0.21 per cent to settle at 5,408.90 points.

The analysts said that the market sentiment got a fillip after food inflation, for the first time this year, eased to single digit at 9.67 per cent, for the week ended July 17. They stated that the falling food prices would take pressure off the government and the central bank, to further tighten the monetary policy. The marketmen said that the investors rolled over their positions in derivative segment from July to August series, enthused by reports of easing food prices. “Volatility was witnessed in the market as today was the settlement day for F&O contracts. Weak trend on RIL capped the gain in the market but I hope tomorrow Dalal Street may open in green on fresh positions,” CNI Research Ltd CMD Kishore P Ostwal said. Investors were bullish on financial stocks as they have factored in the Reserve Bank of India’s latest monetary policy measures, the analysts said. The financial stocks led the rise, with HDFC surging by 3.03 per cent and ICICI Bank by 1.84 per cent. HDFC Bank rose by about 1 per cent, after the lender hiked deposit rates by up to 0.75 per cent. Reliance Industries declined for the second successive day, on worries that gas production in the KG-D6 fields was unlikely to rise for the next 6-12 months, as the company needed to study the reservoir for its sustainability. RIL, which had lost 3 per cent yesterday, dropped further by 1.03 per cent. In past two trades, Reliance’s market valuation dropped by Rs 14,000 crore to Rs 3.3 lakh-crore. RIL holds the maximum weight in the Sensex. “The company is currently producing 60mmscmd of gas from the KG-D6 field and is taking steps to ramp up the production to 80mmscmd but the deadline for the same is likely to be extended from the company’s earlier guidance of Q4 FY 2011,” brokerage firm Sharekhan said in a note. Auto major Mahindra & Mahindra ended at 0.9 per cent higher after the company posted a 40 per cent rise in June quarter profit at Rs 562 crore, which the brokers said was in line with expectations.