BSE Sensex rebounds by 330 points, bank stocks rally

After two consecutive sessions of losses, the BSE Sensex closed trade in the green, gaining 330 points, or 1.31 per cent, as bank and oil and gas stocks rallied.

Markets on Tuesday recouped early losses as capital goods, metal and automobile scrip too climbed.

The 30-scrip index of the Bombay Stock Exchange (BSE), which opened at 25,189.46 points, ended the trade at 25,521.19 points, up 330.71 points, or 1.31 per cent, from previous day's close at 25,190.48 point.

The Sensex touched a high of 25,545.88 points and a low of 25,104.50 points during the trade so far.

The wider 50-scrip National Stock Exchange Nifty closed trade by making healthy gains. It was up 98.15 points, or 1.30 per cent, at 7,631.70 points.

The rally comes after two straight session of losses amidst weak global cues as a result of the worsening security in Iraq and the US threatening intervention with crude oil prices scaling to a nine-month high.

However, selling pressure was observed in the fast moving consumer goods (FMCG) stocks.

The major Sensex gainers were: ONGC, up 4.07 per cent at Rs 444.55; Axis Bank, up 3.79 per cent at Rs 1,839.45; State Bank of India (SBI), up 2.91 per cent at Rs 2,654.40; Coal India, up 2.89 per cent at Rs 400.65; and BHEL, up 2.84 per cent at Rs 247.95.

The losers were: Mahindra and Mahindra, down 1.66 per cent at Rs 1,180.80; Hero MotoCorp, 0.83 per cent at RS.2,589.20; Dr Reddy's Lab, down 0.58 per cent at Rs 2,409; Hindustan Unilever, down 0.53 per cent at Rs 629.95; and Bajaj Auto, down 0.47 per cent at Rs 2,162.40.

The markets were reassured by Reserve Bank of India (RBI) Governor Raghuram Rajan, who said at an industry event that India was better prepared to deal with external shocks than last year.

"Markets rose sharply in the final hour of trading after remaining almost flat for the most part of the day. The rise was a result of some fund buying in the large cap stocks," said Dipen Shah, head of private client group research, Kotak Securities. "The rupee fell at the start of trading before recovering quite a bit mid-day, likely due to the participation by government banks and USD selling by exporters."

The BSE bank index was up 392.23 points, followed by oil and gas index which moved higher by 324.86 points, capital goods index rose 302.51 points, metal index gained 207.76 points and automobile index surged 95.20 points.

However, FMCG index lost 11.71 points.

Among the Asian markets, Japan's Nikkei closed 0.29 per cent up. China's Shanghai Composite Index was lower by 0.92 per cent while Hong Kong's Hang Seng lost 0.42 per cent.

In Europe, London's FTSE 100 was trading 0.08 per cent up and Germany's DAX Index was higher by 0.21 per cent, while the French CAC 40 Index gained 0.20 per cent at the closing bell here.