Market Update: Sensex closes 271 points higher on Insurance Bill hope

Rebounding from one-month lows, stocks on  Thursday rose for the first time in four sessions with benchmark Sensex closing over 271 points higher at 28,930.41 powered by a spurt in bluechips on hopes Parliament would pass a bill hiking foreign investment limits in insurance sector.

Besides, investors cheered the IMF raising its growth forecast for Indian economy for the current fiscal to 7.2 per cent. The bullish sentiment was supported by buying activity ahead of IIP numbers for January and retail inflation data for February to be released later in the day, brokers said.

The 30-share BSE barometer opened higher at 28,798.61 and remained in the positive terrain throughout the session on across-the-board gains. It finally settled with a gain of 271.24 points, or 0.95 per cent, at 28,930.41. Intra-day, it touched a high of 28,971.05 and a low of 28,772.71.

The gauge lost almost 790 points in previous three days.

Also, the 50-share Nifty of the NSE recaptured the 8,700-mark by gaining 76.05 points, or 0.87 per cent, to close at 8,776. It shuttled between 8,787.20 and 8,732.90 intra-day.

It had shed 237.80 points in the preceding three sessions.

Analysts said passage of the insurance bill could raise optimism other stalled economic reforms would also move ahead.

While the government has promulgated an ordinance to hike FDI in insurance business from 26 per cent to 49 per cent, a bill in this regard is scheduled to be tabled in Rajya Sabha today. The bill was passed by the Lok Sabha last week.

Shares linked to insurance saw good activity with Reliance Capital leading the charts with over 10 per cent gains. Max India, Aditya Birla Nuvo and Bajaj Finserv also moved up.

Gains in Sensex and Nifty were powered by gains in Sesa Sterlite, NTPC, Hindalco, Sun Pharma, BHEL, Tata Motors, Tata Steel, ITC, ICICI Bank, Bharti Airtel, Infosys and GAIL.

Overall, 24 constituents in the 30-share Sensex rose.

Laggards included Dr Reddy's, Coal India and M&M.

Sectorwise, the BSE Power index gained the most by rising 2.27 per cent, followed by Realty 1.53 per cent, Consumer Durables 1.49 per cent, Metal 1.43 per cent, FMCG 1.32 per cent and Auto 1.22 per cent.

Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 444.65 crore on Wednesday, according to bourses.

The dollar edged closer towards parity with the euro in the backdrop of the European Central Bank kicking off its stimulus programme this week, while Asian equity markets recovered slightly from a recent sell-off.