Mumbai: The benchmark Sensex recorded its biggest gain in two weeks, closing sharply higher by 240 points on revival of buying by funds in banking and telecom stocks.
Buying activity picked up as general investors felt a steep fall in share prices last month was overdone and the Sensex spurted by 239.94 points to 12,945.88 — its biggest advance since 8 March.
The Sensex had dropped nearly 15% from its peak of 14,724 points on 9 February.
The National Stock Exchange index Nifty also rose by 66.95 points at 3,764.55.
The major contributors were banking shares led by index-heavy ICICI Bank, which surged 5.64% to close at Rs870.35, and State Bank of India, up 3.10% at Rs982.15.
Other big gainers included Reliance Communication Ventures, which rose 4.31% to close at Rs466.65, Hindustan Lever (3.67%, Rs190.75) and Bharti Airtel (3.15%, Rs761.75)
Amont the indices, Bankex, the banking segment index was up 254.06 points at 6,545.33. The second biggest gainers were from metals segment, which gained 115.41 points at 8,252.96 followed by capital goods index, which advanced by 98.71 points at 8,648.18.
The market also received a booster after telecom major Bharti Airtel shares surged following reports that the telecommunication regulator cut a fee on international calls as part of a plan to reduce tariffs.
“Investors are finding value at lower levels,” said Jayesh Shroff, who helps manage about $3.6 billion (Rs15,681 crore) in stocks at SBI Funds Management Ltd in Mumbai. “Some investors covering short positions could also have added to today’s advance.”
UBS AG on 20 March raised the rating on the nation’s equities saying shares are cheap following recent underperformance and the outlook for earnings is improving. The brokerage lifted Indian stocks to “neutral” from “underweight.”