Sensex snaps 6-day fall, up 298

Snapping a six-day fall, Dalal Street climbed 1.6 per cent on Tuesday as investors bought into banks and infrastructure-related shares.

Snapping a six-day fall, Dalal Street climbed 1.6 per cent on Tuesday as investors bought into banks and infrastructure-related shares. The BSE Sensex ended up 298 points at 19, 035.48 as domestic buyers and foreign funds returned to the market.

Indicating the continuing volatility, the index swung from a 0.5 per cent fall in the morning to a gain of 2.5 per cent in late trade. The index had slid for six days in a row to Monday, its longest losing streak in almost five years.

Reports that the Left front may allow the Government to negotiate safeguards for a civilian nuclear agreement with the US aided the surge. “The latest statement by Left leaders indicate softening of their stand on the issue,” said a broker.

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Curbs on inflows through participatory notes, weakness in other world markets and lack of any buying triggers had kept bulls away for over a week, allowing the bear operators to pull the Sensex down by nearly 1,400 points.

Larsen & Toubro and private sector lender ICICI Bank led the gains, as their outlook was seen upbeat. “The market is likely to move in a range… 18,000-20,000 for a reasonable time period,” said a dealer, adding that funds were coming into the market. Dealers said India was a safer bet for investors than many of its Asian peers as a possible slowdown in the US, the world’s biggest economy, would not affect it severely due to its lesser dependence on exports. “India is a domestic growth-led economy and not dependent so much on exports like some other Asian countries,” said an analyst, adding that this factor boosted infrastructure shares like L&T and power producer NTPC.

Larsen added 4.8 per cent to Rs 4,369, while state-run NTPC gained 7.4 per cent to a record close of Rs 272.25.

Though India’s infrastructure output in September grew only 6.0 per cent from a year earlier, slowing from an upwardly revised 9.2 per cent annual rise in August, traders said domestic demand remained buoyant. ICICI Bank rose 2.6 per cent to Rs 1,176.15, reversing a fall in early trade, while HDFC Bank gained 7 per cent to Rs 1,578.50 .

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Analysts expect private sector bank earnings to show a 30 per cent average annual growth in the three years through 2009/10.