Sensex overcomes early losses, stages year's 2nd biggest rally

HDFC and Wipro shone among the Sensex stocks as the benchmark index ended sharply higher by 475 points at 12,158.03, the year's second-biggest rally, after shrugging off early losses at the Bombay Stock Exchange.

Although uncertainty over government formation after the Lok Sabha results continued to weigh on the domestic bourses at the initial stages, a rally in key blue-chip counters helped the Sensex to make good its early losses on renewed buying by foreign funds.

Tracking weak global cues in early trade, the Bombay Stock Exchange 30-share index resumed lower at 11,629.97 but rebounded to settle the day at 12,158.03, a net rise of 475.04 points or 4.07 per cent. In the last two sessions, it was down by nearly 434 points or 3.58 per cent.

In the Sensex pack, HDFC zoomed 7.66 per cent, Wipro 7.40 per cent, ICICI Bank 6.72 per cent, Bharti Airtel 6.23 per cent, Infosys Tech 5.51 per cent, RIL 5.32 per cent, Hindalco 5.31 per cent and BHEL 5.12 per cent.

Similarly, the 50-issue Nifty of the National Stock Exchange also recouped by 126.50 points or 3.56 per cent to 3,681.10 from last close.

Angel Broking vice-president (Research) Sarabjit Kour Nangra said: "Volatility would increase in the run-up to the outcome of the election on May 16. However, any major corrections should be ruled out."

Reliance Industries, the country’s biggest company by market value, jumped 5.32 per cent to its highest in almost eight months.

The IT sector index gained the most, by 5.19 per cent, to 2,836.77, as Infosys, which relies on overseas markets for more than 98 per cent of sales, climbed 5.51 per cent to Rs 1,597.95. Wipro, which counts on overseas customers for more than 7.5 per cent of revenue, gained 7.40 per cent to Rs 375.25.

The tech sector was the second-best performer in today's rally, gaining 5.04 per cent to 2,297.63, following a steep rise in the shares of Bharti Airtel (6 per cent), Idea Cellular (5.57 per cent) and Zee Enterprise (5.24 per cent).

The banking index rose by 4.83 per cent to 6,250.68 as leading private sector lenders -- ICICI Bank, HDFC Bank, Axis Bank, State Bank of India, and Punjab National Bank -- surged after Reserve Bank of India Deputy chairman Rakesh Mohan said financial sector reforms have been constant and gradual.

The rally was so strong that all the sectoral indices ended in the green with gains between 1.02 per cent and 5.19 per cent. Besides HUL, which closed weak, other 29 counters in the Sensex pack finished with sharp to moderate gains.

Asian indices displayed a mixed pattern of trading at close. China was up 1.49 per cent, Singapore 0.75 per cent and Hong Kong 0.38 per cent while Taiwan was down 3.2 per cent, Japan 1.62 per cent and South Korea 0.82 per cent.