Sensex snaps 5-day losing streak

The country's benchmark stock index rose for the first time in six days, led by Reliance Industries and banks as investors judged the 11 per cent decline overdone.

ICICI Bank, India's second-largest bank by assets, advanced the most in almost two weeks. Smaller rival HDFC Bank gained the most this month, rebounding from an eight-day losing streak. Reliance Industries, the nation's largest company by market value, rose as it announced a gas find.

"The fact that the market was able to sustain and extend gains in the last half hour shows that buying is emerging at lower levels," said Rajesh Jain, chief executive officer at Pranav Securities.

"Most of the excesses are out of the market, but it would have been good if the Nifty had closed above its 200-day moving average."

The S&P CNX Nifty, comprising 50 companies, advanced 91.2 points, or 1.9 per cent, to 4,929.45, still below its 200-day simple moving average of 4,986.65. A close above the average is seen by some investors as a further prompt to buy.

The Sensex remained in positive territory throughout the day. It gained 341.13 points, or 2.1 per cent, to 16,949.14, after rising as much as 3.2 per cent. Five stocks rose for every two that fell on the BSE.

The measure's relative strength index, a 14-day moving average of gains and losses, was at 32.5 yesterday, close to the 30 level that indicates to some investors that it is poised to rise.

ICICI Bank advanced Rs 35.50, or 3.3 per cent, to Rs 1,099.25, its biggest gain since February 1. HDFC Bank rose Rs 68.15, or 4.9 per cent, to Rs 1,467.05. It had lost almost 11 per cent in the previous eight sessions and its relative strength index was at 31.5 yesterday.

RIL rose Rs 62.75, or 2.7 per cent, to 2,386.90. The company said it discovered natural gas in a field off India's east coast.