Mumbai, Jan 03 (Agencies): Kicking off the new year on an optimistic note, BSE bellwether Sensex today recorded a 7-week high, although it trimmed early gains to settle 52 points up, with smart buying in HDFC Bank and Tata Steel amid firm cues from global peers.

Investors were upbeat on the first trading session of 2011 on hopes that strong economic growth will reflect good corporate earnings in the third quarter, ending December,2010.

After maintaining the strong gaining momentum of the last three trading sessions, the Bombay Stock Exchange sensitive index slipped from its intra-day high of 20,664.80 on profit- booking. It finished with a modest gain of 51.96 points or 0.25 per cent at 20,561.05 -- the level last seen on November 11, 2010.

The National Stock Exchange's broad-based Nifty witnessed a similar trend and closed at 6,157.60, up 23.10 points or 0.38 per cent from the previous close.

"The beginning to the year 2011 was certainly good, although one would have liked to see the main indices sustaining early morning's gains. One has to wait for a few more days to see how the trend unfolds, especially in the fund flows from overseas investors," IIFL Head of Research Amar Ambani said.

He added, "Street saw value buying in the new year, specially in the metal and banking counters. Firm global peers also boosted the sentiment."

Metals giant Tata Steel dazzled with a gain of 3.60 per cent, becoming the biggest gainer on the 30-share Sensex. Copper producer Sterlite Industries too participated in the rally and advanced by 3.05 per cent.

"Street saw value buying primarily in metal and financial stocks. Metal sector rose as metal prices jumped on the London Metal Exchange on Friday and the steel companies cheered the possibility of a hike in steel prices," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.

Among financial stocks, HDFC Bank was in the limelight, jumping 1.88 per cent and SBI advancing by 0.35 per cent. The state-run lender has hiked base rate to 8 per cent and BPLR by 25 bps to 12.75 per cent effective on Monday.

However, ICICI Bank bucked the trend with a dip of 0.49 per cent.

Also in focus were the battered real estate stocks including Reliance Infra (up 2.43 per cent), JP Associates (up 2.31 per cent) and DLF (up 1.20 per cent).

Of the 30-Sensex components, 10 spoilt the party with two-wheeler giant Bajaj Auto emerging as the worst performer. It skid 4.21 per cent despite reporting record sales for December.

Weakness in the country's most valued firm Reliance Industries, which plunged by 0.39 per cent, was also a dampener for the street.

Among the other major losers were -- IT majors including Wipro (down 1.50 per cent) and TCS (down 0.47 per cent).