Sensex soars 200 pts, rides high on banks, cement firms

Dalal Street shot up 1.96 per cent to a one-week high on Tuesday, led by cement and banking firms...

Dalal Street shot up 1.96 per cent to a one-week high on Tuesday, led by cement and banking firms, as the market mirrored gains across Asia and shrugged off a 25-basis-point increase in a key short-term interest rate.

The 30-issue benchmark BSE Sensex ended 200.24 points higher at 10,415.61, marginally off the day’s high of 10,443.05. Only three stocks lost ground on the marker, which opened higher and remained in positive territory throughout the day.

‘‘The hike in the interest rates was on expected lines and it was factored into stocks,’’ said a dealer. ‘‘The rise was due to a jump in Asian and American markets’’.

Asian stock markets rose as investors snapped up recently beaten-down shares. Indices in Tokyo, Sydney and Seoul were all up more than 1 per cent as they took cues from sharp overnight gains on Wall Street.

Banking stocks gained ground on expectations that the increase in the reverse repo interest rate would not materially impact demand for loans. ICICI Bank rose 5.1 per cent to Rs 541.1. Among state-run banks, Oriental Bank of Commerce jumped 5.8% to Rs 171, Union Bank of India gained 5% to Rs 94.10, Punjab National Bank advanced 4.9% to Rs 346, Corporation Bank gained 4.4% to Rs 234, Canara Bank rose 4% to Rs 185.50, Bank of Baroda gained 2.7% to Rs 207.50, Bank of India advanced 2.3% to Rs 98.50 and State Bank of India rose 0.4% to Rs 744.

The Sensex swung in the range of 9,800 on the lower side and 10,900 on the upper side since late June 2006. The Q1 results announced so far have been largely strong but have failed to cheer the bourses. The sentiment is edgy on the reckoning that foreign institutional investors (FIIs) may not return with the force seen in 2005, when they invested a net $10.7 billion.

UltraTech Cement jumped 5% to Rs 651.95 after reporting a 251% jump in Q1 June 2006 net profit to Rs 210.84 crore (Rs 60.02 crore). Among other cement shares, Grasim jumped 6% to Rs 1,989, Gujarat Ambuja Cements gained 3.6% to Rs 104 and ACC rose 3.3% to Rs 816.

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Low-cost airline Deccan Aviation jumped 14% to Rs 74 on reports that it has overtaken national carrier ’Indian,’ to become the second largest domestic airline in the country. Lupin lost 1.2% to Rs 851. Lupin today reported a 17% growth in Q1 June 2006 net profit to Rs 50.65 crore (Rs 43.15 crore).