Banking stocks pull Sensex up 305 points

The Bombay Stock Exchange's 30-share sensitive index, Sensex, on Thusday advanced 305 points, or 2.3 per cent, its biggest single-day jump in the last five months, recovering most of the losses witnessed in the first two days of this week.

Big buying interest in index heavyweights ICICI Bank, Oil and Natural Gas Corporation and Larsen & Toubro led to the rally.

The Sensex on Thusday opened at 13,256.81 points and moved above 13,000 throughout the day, before closing at 13,487.16. The broadbased S&P CNX Nifty also rose 77.85 points, or 2.07 per cent, to 3,843.05.

Analysts, however, are not upbeat after the two-day long recovery of the Sensex because their concerns over the stiff valuations remain and are not giving short-term calls to their investors.

"Hold on for one more day or let us wait till Monday to see whether the correction has ended," Ajay Parmar, head of ideas research, Emkay Shares and Stock Brokers Ltd, said.

The Sensex has recovered almost 492 points, or 61 per cent, from the lowest 12,995 point level witnessed on Tuesday and is still 312 point short of reaching the 13,799 point level of Friday, after which the two-day long correction phase started.

Banking stocks were the top gainer led by ICICI Bank, which rose 4.96 per cent to Rs 869.25. Other gainers included Satyam (up 4.46 per cent to Rs 467.60), Cipla (up 4.46 per cent to Rs 247.60), National Thermal Power Corporation (up 4 per cent to Rs 145.55) and fast-moving consumer goods major Hindustan Lever (up 3.65 per cent to Rs 145.55).

The Consumer Durables index, which gained 3.97 per cent, was the biggest gainer among sectoral indices, followed by the Bankex (up 2.58 per cent).

Only two stocks in the Sensex ended in the red "" Hero Honda lost 0.75 per cent to Rs 713.30 and banking major State Bank of India went down 0.42 per cent to Rs 1,222.95.