Sensex snaps 4-day slide, rebounds 3%

Sensex snaps 4-day slide, rebounds 3%

Mumbai: Indian shares rose on Tuesday for the first time in five sessions, rebounding 2.95% as global risk appetite was bolstered by optimism European leaders will pull together a rescue plan for the debt-ridden euro zone.

Beaten-down energy major Reliance Industries Ltd led the rise, followed by software services bellwether Infosys Ltd and ICICI Bank Ltd.

The 30-share BSE index rose 472.93 points to 16,524.03, its best one-day percentage gain in a month. All but one of its components closed in the green.

However, traders were not convinced the recovery could be sustained, given the uncertain outlook for the world economy.

“Nothing has fundamentally changed overnight," said Deven Choksey, chief executive and managing director of K. R. Choksey Shares and Securities Pvt. Ltd. “I don’t think any fresh allocation of money has started taking place." He said there was short-covering after the index had slumped 6% over the previous four sessions.

Reliance Industries, which has the heaviest weight in the index, rallied 5.01% to 797.20. The stock, which had slid 9.4% over the previous three days, is down more than 24% in the year to date due to concerns about falling gas output from its field off India’s east coast.

Infosys, which gets most of its revenue from the US and Europe, rose 3.8% on hopes a stabler Europe will help boost spending on outsourcing. Bigger rival Tata Consultancy Services Ltd gained 4.4%.

ICICI Bank climbed 3.3%, while rivals HDFC Bank Ltd and State Bank of India added 1.6% and 2.35%, respectively.

Telecom firm Reliance Communications Ltd rose 3.7% after its chairman Anil Ambani said the company was in advanced talks with many consortiums to sell stake in its telecom tower unit.

Shares in group firm Reliance Capital Ltd firmed 1.4% after Ambani said it was in advanced talks to sell stake in asset management company to Japan’s Nippon Life Insurance Co. DLF Ltd and Tata Motors Ltd rose 8.2% and 6.1%, respectively.

Pipavav Defence and Offshore Engineering Co. Ltd fell 4.3% after India’s defence ministry decided to put on hold a joint venture between the firm and state-run Mazagon Dock Ltd to build warships and submarines.

The 50-share National Stock Exchange index rose 2.8% to 4,971.25. In the broader market, there were 3.5 gainers for every loser on moderate volume of 519 million shares.

JB Chemicals and Pharmaceuticals Ltd rose 2.7% after it called off a proposed $34.9 million sale of its prescription drugs business in Russia to Dr Reddy’s Laboratories Ltd. Dr Reddy’s gained 0.95%.

Glenmark Pharmaceuticals Ltd rose 1.2% after its unit received a tentative approval for migraine treatment tablets zolmitriptan from the US Food and Drug Administration.