Indices bounce back sharply

STOCK REPORT

Led by gains in bank and technology shares, key indices bounced back from day's lows to end higher on Tuesday. Indices had opened firm after Infosys Technologies posted robust second quarter earnings. However, the higher levels attracted profit booking and equities slipped into negative.

Dealers attributed the late market rally to Reserve Bank of India's notification late Monday allowing banks to treat their entire investment fluctuation reserve as Tier-1 capital.

Refco Sify Securities noted that the move was a positive for the banking sector, as it would increase banks existing Tier-I capital ratios by 2-5 per cent.

The brokerage sees Dena Bank's 9.52 per cent capital adequacy ratio rising 0.22 per cent.

The Bombay Stock Exchange's 30-share Sensex closed at 8540.56, up 56.70 points, or 0.67 per cent, over Monday. Intra-day the index touched a high of 8563.85 and low of 8381.96.

The National Stock Exchange's 50-share Nifty gained 22.70 points, or 0.88 per cent, to end at 2589.55. The index recorded a high of 2592.00 and low of 2533.70 during the day. Trading volume was at around Rs 84 billion, compared with Rs 71 billion clocked on Monday.

In the Nifty, Oriental Bank of Commerce, up 4.4 per cent, was the top gainer. Punjab National Bank, State Bank of India and Tata Motors were up around 4 per cent each.

Oil and Natural Gas Corp, Maruti Udyog, Infosys Technologies, Jet Airways, HCL Technologies, Hindustan Petroleum Corp., Sun Pharmaceutical and Tata Steel were up 1.5-2.5 per cent. Early today, Infosys posted a net profit of Rs 6.06 billion for the July-September quarter on an income of Rs 22.94 billion.

The second quarter numbers were above consensus estimates. The company also raised full-year guidance for earnings per share and income around 4 per cent. Dr Reddy's Laboratories was the biggest index loser, down 3 per cent.

Ranbaxy Laboratories, Hero Honda Motors, Bharat Heavy Electricals, Gujarat Ambuja Cements, GAIL India, Steel Authority of India, were down nearly 2 per cent each.

The other key companies, also in the technology domain, that reported July-September earnings today were iGate Global Solutions and CMC.

Information technology solution provider, CMC reported 25 per cent on-year fall in net profit to Rs 94.60 million. Sequentially, the net profit was down 38 per cent. Although there was a 3 per cent dip in revenues sequentially, on-year the total revenues grew 12 per cent to Rs 1.97 billion.

Among second line indices, CNX Bank Index spurted 3 per cent to end at 4489.40. CNX IT Index ended up 1.4 per cent at 3429.95.

The CNX Midcap Index ended almost flat at 3785.95, but off the session's low of 3733.15.