Rebound Pares Losses

Equities rebounded amid thin volumes and a technical rebound to finish higher today, even as investors focused on benefits to companies from the Union Budget unveiled yesterday.

The 30-stock Bombay Stock Exchange (BSE) sensitive index (Sensex) jumped 116.44 points to wind up at 3,678.75, thereby wiping out most of Thursday's losses.

Despite a nationwide bandh called by the Vishwa Hindu Parishad (VHP), volumes in the market were modest.

On the National Stock Exchange (NSE), the S&P CNX Nifty ended 35.95 points higher at 1,178.

In the old economy segment, fast-moving consumer goods (FMCG), cement, banking and state-owned companies remained in the limelight.

Brokers said the undertone remained edgy despite the day's gains following the communal rioting in Gujarat.

ITC, the country's biggest cigarette maker, rose 1.4 percent after the government left the excise duty on cigarettes untouched.

ITC and Hind Lever together contribute around 27 per cent to the sensex.

Gainers led losers 613 to 370, with index heavyweights leading the uptrend.

ACC surged 7.8 per cent to Rs 176.35, Larsen & Toubro jumped 4.6 per cent to Rs 200.40 and Grasim climbed 5 per cent to Rs 304.10.

While banks stocks witnessed a recovery on reforms in the sector such setting up of an asset restructuring company to tackle the high non-performing asset problems and the linking of interest rates on small savings schemes to one-year yield on government paper announced in the Budget.

State Bank of India gained 2.13 per cent to Rs 232.65. Among private sector players, ICICI Bank gained 7.4 per cent to Rs 134.95.

Hectic buying was witnessed in media shares under the lead of media major Zee Telefilms, which surged 9 per cent to Rs 157.50.

In other media shares, Sri Adhikari Brothers (up 14.6 per cent to Rs 172.25), Tips Industries (up 12.7 per cent to Rs 162.30) and Padmalaya Telefilms (up 9.3 per cent to Rs 150.90) all soared. Bargain hunting was witnessed in software shares with HCL Technologies rallying 4.3 per cent to Rs 272.80 and Infosys surging 2 per cent to Rs 3,602.80.

Reuters adds: Hero Honda Motors Ltd, India's No 1 motorcycle maker, rose 6.1 percent on expectations of strong February sales.

Minutes after the market closed, the company said motorcycle sales in February surged 44 percent from a year ago.

Despite Friday's gains, brokers said the undertone remained weak in the wake of the communal violence in the western state of Gujarat.

"The emerging situation is of concern, and unless it is brought under control, it could be disastrous," Cholamandalam's Krishnan said.

Troops moved into the riot-hit state to control the worst flareup of religious violence in the country in a decade, in which nearly people have died.