Infy, ICICI Bank lead recovery

STOCK REPORT

The Sensex jumped as some investors judged the recent declines amid a global equity selloff as excessive. Infosys Technologies and ICICI Bank led gains among stocks with the largest capitalisation.

"Valuations appear attractive after the sharp correction,'' said Sanjay Dongre, who manages about $1 billion in stocks at UTI Asset Management Co in Mumbai.

The Bombay Stock Exchange Sensex rose 282.05 points, or 2.3 per cent, to 12,697.09. The index, which on Tuesday had the largest fluctuation among equity markets included in global benchmarks, has tumbled 7 per cent since February 27 as part of a slump that eroded at least $2.4 trillion from the value of markets globally.

Trading at the Bombay Stock Exchange and the National Stock Exchange was halted between 11:45 am and 12:30 pm local time to make allowance for any disruption in data received via satellites because of the sun's position. The exchanges traded until 4:15 pm local time to make up for the halt.

The S&P/ CNX Nifty Index on the National Stock Exchange added 79.15 points, or 2.2 per cent, to 3655.65.

Infosys, the nation's second-biggest software exporter, climbed Rs 109.7, or 5.5 per cent, to Rs 2,116.3, reversing a 6.8 per cent slide over the past two days.

ICICI, the country's second-largest lender, jumped Rs 30.9, or 3.8 per cent, to Rs 851.6. The shares dropped 4 per cent over the past two days. The two stocks account for about a fifth of the Sensex's weight.

The Sensex was valued at 26.7 times earnings on February 11, a ratio that had fallen to 22.9 times as of yesterday's close. The Morgan Stanley Capital International Emerging Markets Index is valued at 14.4 times earnings.

The Sensex's relative strength index, a measure based on advances and declines in the previous 14 days, was 24.7 as of yesterday's close. A reading below 30 indicates to some analysts the index is poised to rise.

A drop in the value of the Japanese yen eased concern that investors would sell assets funded through the so-called carry trade.

Investors use the yen carry trade to borrow yen cheaply to purchase assets with higher yields, including equities in emerging markets such as India. The Japanese yen fell the most against the euro in 17 months.