Bargain hunt lifts Sensex 135 points

Bargain hunting at lower levels, coupled with short covering, stalled a four-day slide yesterday as institutional investors scooped up "cheaper" blue chip stocks.

The theme, however, was index stocks: 26 of the 30 Sensex and 42 of the 50 Nifty stocks ended the day with gains. Banking stocks, which were hammered no end on Tuesday, were in great demand yesterday.

The Bombay Stock Exchange (BSE) Sensex gained 2.42 per cent (135.78 points) to close at 5,756.76, after falling 375 points in the last four trading sessions. The National Stock Exchange (NSE) S&P CNX Nifty added 53.20 points to end at 1,822.20.

Meanwhile, in the gilts market, prices of long-term paper went up by 25-30 paise while those of medium-term paper gained 10-15 paise.

The yield on the 10-year benchmark 7.37 per cent 2013 paper closed at around 5.15-17 per cent, down from Tuesday's close of 5.19 per cent.

Dealers added that the cancellation of today's scheduled borrowing of Rs 5,000 crore added to the already buoyant sentiment in the market.

In the stockmarket, heavyweights State Bank of India surged 3.65 per cent to close at Rs 590.50, Reliance Industries soared 2.98 per cent to Rs 572.45 and Hindustan Lever added 0.73 per cent to Rs 193.10.

Power stocks continued to remain on everyone's buy list. Tata Power added 6.54 per cent to close at Rs 378.95 and Reliance Energy jumped 5.82 per cent to settle Rs 579.30.

Auto companies were among the big gainers. Tata Motors rose 6.26 per cent at Rs 544.55, Hero Honda Motor jumped 6.21 per cent to Rs 461.25 and Bajaj Auto added 1.90 per cent to Rs 1,028.50.

The Sensex moved in a range of 196 points in a volatile trading session.