Sensex jumps 346 points, banks lead gain

Snapping two-day fall, the BSE benchmark Sensex shot up 346 points on Friday as the government clarified that P-Note holders have no tax liability in India, and global markets showed firm trend.

The Sensex, which had lost 200 points in the last two sessions, bounced back 345.59 points or 2.03 per cent to 17,404.20 on revival of buying by foreign funds.

The NSE 50-issue index Nifty climbed 116.70 points, or 2.25 per cent to 5,295.55, after testing 5,300 level during the session. Trading sentiment turned bullish after Finance Minister Pranab Mukherjee clarified that FIIs investing in stocks through participatory notes (P-Notes) will not have to pay taxes in India. This route is used by foreign investors to pick up Indian equities through overseas funds registered in the country.

Besides, recovery in rupee against the US dollar from 11-week lows supported buying sentiment. A firm opening in Europe on expectations the region's finance ministers will agree to increase rescue funds in its meeting on Friday further supported the uptrend to end the financial year on a promising note.

Banking stocks rose sharply on value buying after recent sell-offs. State Bank of India jumped up by 1.62 per cent; ICICI Bank, 3.64 per cent; HDFC Bank, 1.83 per cent; and Bank of India 2.75 per cent.

Besides, Reliance Industries shot up 3.23 per cent and Infosys, 2.65 per cent. The two carry around 20 per cent weight on the index.

Of the 30 Sensex scrips, 28 closed with gains, while Jindal Steel and Sun Pharma ended lower.