Banks gain on earnings hope

STOCK REPORT

Key indices ended up today, tracking a firm trend in overseas markets, after US Federal Reserve head Ben Bernanke on Wednesday acknowledged a housing slump in the world's largest economy.

This has fuelled hopes the Fed will start cutting interest rates from next year, which would see more funds being diverted to markets such as India.

Here, investors also resumed buying stocks due to the near 2 per cent fall in key indices in the last two sessions.

Today, the Bombay Stock Exchange Sensex ended at 12389.41, up 185.40 points or 1.5 per cent, after touching a low of 12299.21 and a high of 12415.97 intraday.

The National Stock Exchange Nifty ended at 3564.90, up 49.55 points or 1.4 per cent, after touching a low of 3515.60 and a high of 3574.95 intraday.

Turnover on both exchanges together was around Rs 10,900 crore, up marginally from Wednesday.

Lead Nifty gainers were Steel Authority of India, up 6 per cent at Rs 80.25, HDFC Bank, up 4.6 per cent at Rs 931, and Oriental Bank of Commerce, up 3.8 per cent at Rs 273.

Bank shares gained on expectations of strong July-September earnings on the back of higher prime lending rates, and falling government bond yields. Heavyweights Hindustan Lever, and Tata Steel ended 1-2 per cent up.

Tata Steel rose on speculation the company is close to buying South African steel giant Corus Group. Among the few Nifty losers, Suzlon Energy was down 0.8 per cent at Rs 1,267.75 and Bharti Airtel shed 0.3 per cent to close at Rs 459.95.

All BSE sector indices gained. BSE IT and bank indices closed up 2 per cent.

Among broad indices, CNX Midcap Index was up 2 per cent and S&P CNX 500 Index was up 1.5 per cent.

Tyre shares also gained, as a retreat in international crude oil prices have weakened prices of synthetic rubber, which is a petroleum-based product.