Date:01/10/2008 URL: http://www.thehindu.com/2008/10/01/stories/2008100157001800.htm

Business - Briefly

RBI, SEBI remarks lift Sensex

MUMBAI: Defying global trends, the Bombay Stock Exchange 30-share sensitive index (Sensex) shot up by 264 points on Tuesday after Finance Minister P. Chidamabram and the Securities and Exchange Board of India (SEBI) pitched in to assuage investors whose worries deepened following the rejection of the much-awaited mega rescue package for bad mortgage debts in the U.S. by lawmakers.

After dropping 442 points in early trade on rejection of the $700 billion bailout package, the Sensex moved up by 264.68 points to close at 12860.43 on encouraging comments by the Finance Minister and the SEBI Chairman, C. B. Bhave. It closed at 12595.75 on Monday.

The rally was led by top private sector lender ICICI Bank, the biggest gainer among the Sensex scrips at 8.42 per cent, a day after it was hammered on rumours over its financial health.

In highly volatile trading, the Sensex moved between 12995.20 and 12153.55. The National Stock Exchange index, Nifty, improved by 71.15 points, or 1.85 per cent, to 3921.20.

Marketmen said the Reserve Bank of India’s remarks that ICICI Bank had enough liquidity and the organisation was well capitalised lifted the lender’s share. They said the bank’s Chief Executive officer, K.V. Kamath’s reassuring comments on its financial strength also helped in its surge. Another banking major SBI rose 5.2 per cent and Axis Bank 7.67 per cent, pushing the sectoral index by 4.92 per cent.

Banking stocks rebounded as much as five per cent as government allayed fears of global financial crisis affecting the domestic market, saying that Indian banks were well regulated.

Led by ICICI Bank, shares of all major lenders today shot up in the range of 5-8 per cent on the Bombay Stock Exchange. State Bank of India rose 4.32 per cent to close at Rs. 1,465.65. — PTI

Corrections and Clarifications

(In a PTI report "RBI, SEBI remarks lift Sensex" ("Business" page, October 1, 2008), the fifth paragraph said "... Another banking major SBI rose 5.2 per cent and Axis Bank 7.67 per cent, pushing the sectoral index by 4.92 per cent", while the last paragraph said "... State Bank of India rose 4.32 per cent to close at Rs. 1,465.65." The detail in the last paragraph is right.)