Sensex snaps 2-day fall, gains 265 points

The Bombay Stock Exchange (BSE) Sensex snapped two-day decline and gained over 265 points on buying in  undamentally strong stocks like RIL and Infosys, as fall in crude oil prices and lower than expected inflation improved market sentiment.

The BSE benchmark index Sensex, which had lost 295 points in the last two sessions, bounced back by 265.39 points to 18,439.48.

The broad-based National Stock Exchange index Nifty spurt 86.05 points to 5,531.50 on the back of fresh rise in the two most heaviest-weighted stocks of Reliance Industries and Infosys Technologies.

Reliance rose to two-month high, gaining Rs26.05 at Rs1,017.65 as lower cost of crude improved the prospects of its profitability. Infosys, the largest software exporter rose Rs44.80 to Rs3,099.25. The two stocks carry nearly 23% weightage on the 30-stock barometer Sensex.

Inflation rose only marginally to 8.31% during February from 8.23% in the previous month. Brokers said it was lower than projections and reduced worries of a steep hike in interest rates that hit corporate profits.

They said crude oil declined to the lowest level in two weeks on anticipation that the earthquake in Japan will reduce demand for the time being.

Indian Oil, the largest refiner, rose Rs4.70 to Rs309.90, Bharat Petroleum was up Rs23.85 to Rs570.50 and Oil India gained Rs9.35 to Rs1,280.10.

The oil and gas sector index gained the most by rising 2.24% to 9,936.95, followed by metal sector index by 2.01% to 15,676.33 as Tata Steel rebound from a 6-month low.

The IT index rose by 1.48% to 6,240.78, Banking index by 1.36% to 12,358.31, power index by 1.27% to 2,586.58 and Teck index by 1.26% to 3,642.93.

In the 30-BSE index components, 25 stocks closed with gains, four ended with losses while BHEL remained unchanged at Rs1,974.70.

As the buying pressure spread over a wide front, the midcap index rose by 0.49% to 6,561.48 and smallcap index by 0.26% to 7,920.72.