Indices up 2% on thin volumes

STOCK REPORT

Key indices ended up nearly 2 per cent buoyed by a sharp surge towards the end of the session on likely short covering ahead of futures expiry next week, dealers said.

"This is more of a relief rally as the market has been subdued for too long," said Sandeep Shenoy of Pioneer Intermediaries.

However, volume remained low as large investors and funds are still waiting on the sidelines.

Combined turnover on the NSE and BSE was Rs 8,600 crore, down 4 per cent from Tuesday.

The Bombay Stock Exchange's 30-share Sensex ended at 12945.88, up 239.94 points, or 1.9 per cent from Tuesday, after touching a low of 12664.33 and high of 12964.94.

The National Stock Exchange's 50-share Nifty closed at 3764.55, up 66.95 points, or 1.8 per cent. It touched a low and high of 3680.60 and 3771.20.

The indices gains were led by banking shares. The BSE Banking index rose 4 per cent.

"The current rise in banking shares is illogical given the uncertainty about interest rates around the world and liquidity worries. This is an indication that the current rise is artificial," said Phani P Shekhar, fund manager at Angel Broking.

Dealers said banking shares today rose after the finance minister said liquidity would ease in the next few days on government spending.

ICICI Bank, the top Nifty gainer, ended up 5.6 per cent at Rs 870.55.

Cement shares were down 1-5 per cent on talk as cement companies are likely to meet the finance minister later today, instead of Thursday, to discuss cut in prices.

On Monday, the finance minister had told the Rajya Sabha that he had invited cement manufacturers for a discussion on the issue.

India Cements ended down 4.7 per cent at Rs 164.80, Grasim was down 1 per cent at Rs 2,103.60, Ultratech was down 2.4 per cent at Rs 778.80, and Gujarat Ambuja was down 4 per cent at Rs 106.45.

Despite a nearly 2 per cent rise in indices, buying in mid-cap companies was limited.

Reliance Industries was up 1.3 per cent at Rs 1,340 and Hindustan Petroleum Corp was up 0.4 per cent at Rs 265.30.