Power, banking scrips boost Sensex

Boosted by a strong rally in power and banking shares, the key stock indices surged sharply on Tuesday after witnessing a downside during the initial hours of trade.

Share prices of power stocks witnessed a sharp surge on indications that the Left Front was easing its stand on Indo-US nuclear deal.

News reports suggested that Left would allow the government to negotiate safeguards for a civilian nuclear agreement with the US, while retaining the right to veto the deal's further progress.

Talking to a local news channel, CPI(M) General Secretary A P Bardhan said the Left may consider such a proposal. The support of Left parties was crucial for the Congress-led UPA government at the Centre.

The benchmark Sensex of the Bombay Stock Exchange was up by 298 points or 1.59 per cent to close at 18,636.21 points. The broader index CNX S&P Nifty of NSE too rose by 78.30 points or 1.39 per cent to settle at 5,695.40.

The recently launched BSE Power index was up 3.04 per cent at 4,527.68. NTPC, the country's largest power generating company, rose by 7.40 per cent to Rs 272.25 and was the top gainer among the Sensex components. Reliance Energy too was up by 1.92 per cent to Rs 1,853.

Areva Power was the top gainer in the BSE power index. The counter rose by 13.44 per cent at Rs 2,914.55. Other top gainers included Torant Power up by 7.09 per cent at Rs 196.45 and Suzlon Energy up 3.59 per cent at Rs 1,963.

According to Murthy Nagrajan, head, fixed income group, Mirae AMC, banking stocks were gaining as it was unlikely that interest rates would rise further.

"With the recent industrial production data not showing a poor industrial growth, the bond yields too have gone down. As a consequence of which interest rates are not likely to rise with the exception of CRR," he said.

The BSE Bankex rose by 3.45 per cent to close at 10,538. HDFC Bank was the top gainer among the banking stocks. The stocks rose by 6.98 per cent at Rs 1,578.50.

Axis bank gained 6.15 per cent at Rs 9,49. The country's largest private sector bank, ICICI Bank, was up by 2.57 per cent at Rs 1,176.15, while State Bank of India the largest PSU bank, gained 2.62 per cent at Rs 2,295.70.

Under pressure over rising concerns of deepening sub-prime crisis, the benchmark index had slipped by over 1,600 points from its all time high of 20,238 on October 30.

Anil Ambani promoted RNRL rose by 11.26 per cent at Rs 164.50. The stock had witness some sell-off after it touched a high of Rs 206 on November 6.

The overall market breadth remained positive as 65.85 per cent or 1,859 stocks advanced against the declines of 31.81 per cent or 898 stocks.

The global indices, on the other hand, remained subdued. UK's FTSE 100 fell 0.48 per cent to 6,307.60.

France's CAC 40 dropped 0.54 per cent to 5,505.47 and Germany's DAX declined 0.48 per cent to 7,769.29.

Asian markets closed on a mixed note. Singapore's Straits Times was down 1.02 per cent at 3,475.47. Japan's Nikkei was down 0.46 per cent at 15,126.63.

China's Shanghai Composite fell by 0.57 per cent at 5,158. Taiwan Weighted rose 0.65 per cent at 8,727.21, South Korea's Seoul Composite was up 0.49 per cent at 1,932.89 and Hong Kong's Hang Seng rose 0.50 per cent at 27,803.35.