Indices snap four-day drop

STOCK REPORT

Key indices ended up 2.5 per cent, snapping a four-day bearish trend, on across-the-board buying triggered by firm overseas markets. Short covering ahead of the February derivatives contract expiry on Thursday also boosted gains.

"The market had recovered towards the end of the day on Wednesday. Today, the same positive sentiment was carried forward, and firm Asian and US markets also helped," a dealer said. Markets will be closed on Friday for Mahashivaratri.

Indices briefly came off highs on higher-than-expected inflation data, but recovered to rise further, after a cut in petrol and diesel prices allayed fears of further interest rate hikes to curb inflation.

The country's headline inflation rate rose to 6.73 per cent for the week to February 3 from 6.58 per cent a week ago, and higher than analysts' expectations of 6.58 per cent.

The Sensex ended at 14,355.55, up 345.65 points or 2.5 per cent from Wednesday. Intraday it moved between 14,107.09 and 14,046.80. The Nifty ended at 4,146.20, up 99.10 points or 2.5 per cent.

Turnover on both the exchanges was roughly Rs 15,100 crore, against Rs 13,100 crore on Wednesday. The CNX Midcap and the S&P CNX 500 Index ended up 3 per cent each.

On the BSE, advances led declines 4:1. Oil retailers ended off highs after the government cut retail petrol and diesel prices, effective from midnight, in a move to curb rising inflation.

Prices of petrol were cut by Rs 2 a 1 litre, and diesel by Re 1 a litre. Hindustan Petroleum, which was up 2 per cent before the announcement, fell 1 per cent to Rs 276 after the cut. Bharat Petroleum ended up 1 per cent at Rs 328. The stock was up 3 per cent early today.

Ranbaxy slumped 5 per cent to Rs 393 on reports of raids at the company's US office by the US Food and Drug Administration. It was the worst hit on the Nifty.

Bank shares recouped Wednesday's losses after several banks increased their lending and deposit rates to make up for the increase in cost of funds, following the cash reserve ratio hike on Tuesday.