Sensex rebounds by 219 points; financial shares in demand again

Stock markets today bounced back with the benchmark Sensex rallying 219 points on aggressive buying by funds in anticipation of good fourth earnings by corporate.

The 30-share index of the Bombay Stock Exchange closed a hefty 218.74 points, or 1.23%, higher at 17,933.14 points, a day after falling from its two-year high level.

The National Stock Exchange's 50-share Nifty also settled with a net rise of 1.08% at 5,361.75 points.

On a weekly basis, the Sensex extended gains for the ninth week in succession on the back of sustained buying momentum since early February.

The barometer had lost over 250 points yesterday on fears of high food prices leading RBI signalling a hike in interest rates amid a steep fall in bourses across the world.

The sentiment turned bullish today, marketmen said, as the sharp decline in the previous day bas brought the valuations lower and presented a fantastic opportunity to investors to buy them back.

Expectations of a healthy fourth quarter earnings by companies helped sustain the momentum throughout the day, they added. The earning season starts with Infosys announcing its numbers on April 13.

"Investors, who sold stocks at higher levels, again bought them back after valuations came down with yesterday's fall," Bonanza Portfolio assistant VP research Avinash Gupta said.

Brokers said positive global cues also helped the market to rebound. Putting behind Greece worries, Wall Street managed to close in the green overnight buoyed by better-than-expected retail sales figure in the US.

Foreign funds have put in over $5 billion in Indian market so far in 2010, with $4.5 billion in equities and about a billion dollar in debt.

Tata Motors topped the list of gainers at 4.51%. Financial stocks, which had take a hit amid worries of a hike in lending rates, recovered the lost ground. HDFC, HDFC Bank and ICICI Bank rose in the range of 1-3%.

Among financial stocks, HDFC climbed 4.41%, HDFC Bank 2.56% and ICICI Bank 1.76%. BHEL at 2.79% at Jaiprakash Associates 2.57% were the other significant Sensex gainers.

RIL, which has the maximum weight in the index, settled with a gain of 1.78% to Rs1,123.95.

IT stocks remained under pressure with rupee trading at 44-45 level against the US dollar. Wipro and TCS fell by 0.82 and 0.76%, respectively. Infosys, however, managed a minor 0.79% gain.