Bank scrips shine as Sensex gains 114 pts

Sensex ends 2.11% higher at 5528.94.

Value-buying at lower levels, together with news of a smooth roll over of March positions in the derivatives segment and fading year-end considerations, helped the Bombay Stock Exchange (BSE) Sensex close 2.11 per cent (114.50 points) higher at 5528.94.

Banking counters were in the limelight, boosted after government officials ruled out chances of average inflation higher than 5 per cent.

A comfortable inflation reduces the chances of an interest rate surprise, market sources said. Among sectoral indices, the BSE Bankex was the biggest gainer closing 4.95 per cent higher at 2899.07.

Sensex heavyweight State Bank of India scrip surged 4.72 per cent to Rs 593.10, ICICI Bank was up 5.56 per cent to Rs 284.65 on aggressive pricing of its proposed IPO, and the HDFC Bank scrip was up 3.14 per cent to Rs 374.95. Indeed, the ICICI Bank scrip was the highest gainer in the Sensex basket where 26 of the 30 scrips ended with gains yesterday.

IT stocks were in great demand ., as operators started value buying in reaction to strong overnight gains in the US markets. The BSE's IT sector index was up 3.24 per cent led by heavyweight Infosys Technologies which gained 2.59 per cent at close to Rs 5,300.

The Satyam Computer scrip was up 4.65 per cent to Rs 320.65 and Wipro was up 3.55 per cent to Rs 1,427.90. Market sources said the tech sector buying was driven by expectations of the good quarterly performance by top companies and positive guidance for the coming year, despite the Indian rupee's continuing strength.

PSU scrips BPCL was up 7.41 per cent to Rs 470.25 and Bhel was up 2.70 per cent to Rs 2.70 per cent, propelling the BSE PSU index 2.39 per cent higher.

However, the HPCL and MTNL scrips, both Sensex stocks, ended with marginal losses. The HPCL scrip lost 0.03 per cent to Rs 486.40 while the MTNL scrip lost 0.61 per cent to Rs 122.70.

Rajiv Sampat, director, Parag Parikh Securities, said, "liquidity is coming back into the markets on listing of the recent public offerings. Foreign institutional investor inflows continue to be positive." The National Stock Exchange (NSE) S&P CNX Nifty was up 2.53 per cent to 1,747.50.

Market debutant Petronet LNG began trading at a premium of almost seven per cent on the BSE but ended at Rs 14.65, 2.33 per cent lower than its offer price of Rs 15.

The Reliance Industries scrip was up 2.01 per cent to Rs 525.45 and Hindustan Lever was up 1.82 per cent to Rs 148.10.

Cement heavyweights Grasim was up 4 per cent to Rs 1,042, Gujarat Ambuja Cements was up 3.81 per cent to Rs 299.50 and ACC was up 3.74 per cent to Rs 255.35. Analysts say that construction activity in the coming months will help off take of cement companies.

The Tata Motors scrip was up 2.92 per cent to Rs 466.35, Bajaj Auto was up 1.25 per cent to Rs 871.40 and Hero Honda Motor was up 1.24 per cent to Rs 469.95.

Zee Telefilms was up 4.37 per cent to Rs 125.50 and Tata Power was up 2.78 per cent to Rs 369.55.

Players expect heightened activity in the derivatives segment ahead of the quarterly results in the coming month. Around 80 per cent of the outstanding positions in the March series, which expired on Thursday (March 25), were successfully rolled over into April series.