The 30-share benchmark sensitivity index of the Bombay Stock Exchange (BSE), the Sensex, rallied, Wednesday, to climb 1.30 percent or 202.89 points to end up at 15,790.51 with 17 components rising, boosted by a late run in banking stocks even as Asian markets all around tumbled.
The main index touched an intra-day high of 15,829.59 and low of 15,464.72.
Strong earnings posted by smaller rival Yes Bank helped blue chip banking stocks surge. While top mortgage lender Housing Development Finance Corporation (HDFC) gained 4.24 percent to Rs.2407.50, HDFC Bank soared 5.50 percent to Rs.1376.05.
India's largest private sector bank, ICICI Bank advanced 2.86 percent to Rs.836.50 while the nation's top bank, the state-run State Bank of India (SBI) climbed 1.12 percent to Rs.1693.50.
Sensex heavyweight Reliance Industries (RIL) and engineering and construction major Larsen & Toubro (L&T) rose 1.55 percent and 2.17 percent to Rs.2418.05 and Rs.2637.30 respectively. The two stocks contribute to almost a quarter of the weight of the index.
Tata Group companies Tata Steel and Tata Motors gained 3.44 percent and 0.69 percent to Rs.678.90 and Rs.631.45 respectively.
Other gainers were BHEL (up 3.74 percent to Rs.1776.75), Cipla (up 2.42 percent to Rs.217.60), Reliance Energy (up 2.30 percent to Rs.1176.90), Ambuja Cements (up 1.82 percent to Rs.120.20), Hindalco (up 1.38 percent to Rs.172.65), Infosys Technologies (up 1.27 percent to Rs.1479.90), Grasim Industries (up 0.65 percent to Rs.2576.95), NTPC (up 0.62 percent to Rs.187.70) and ONGC (up 0.16 percent to Rs.1012.90).
The losers' pack was led by Maruti Suzuki, Hindustan Unilever (HUL) and Bharti Airtel which slipped 1.44 percent, 1.39 percent and 1.04 percent to Rs.733.45, Rs.244.45 and Rs.819.95 respectively.
IT stocks Tata Consultancy Services (TCS), Wipro and Satyam Computer Services fell 0.98 percent, 0.56 percent and 0.37 percent to Rs.876.65, Rs.411.70 and Rs.427.50 respectively.
Other losers were DLF (down 0.91 percent to Rs.610), Jaiprakash Associates (down 0.90 percent to Rs.219.55), Reliance Communications (down 0.84 percent to Rs.496.35), ACC (down 0.62 percent to Rs.820.25), ITC (down 0.46 percent to Rs.207.35), Mahindra & Mahindra (down 0.24 percent to Rs.607.90) and Ranbaxy Labortories (down 0.07 percent to Rs.470.40).
Wednesday's rally helped the Sensex post its highest close since April 3. The index, which hit a record high of 21,206.77 on Jan. 10., is down about 22 percent this year.
Except for Realty (down 1.59 percent) and FMCG (down 0.48 percent) counters, all the sectoral indices ended in the green.
Bankex, Power and Consumer Goods led the upward rally, gaining 3.01 percent, 2.74 percent and 2.66 percent respectively. Other counters ended up in a range of 1.73-0.05 percent.
The BSE Midcap and Smallcap indices performed well for the day, ending up 1.39 percent and 1.62 percent to 6471.51 and 7941.11 respectively.
The market breadth was overall positive as 1829 shares advanced, 794 shares declined and 66 shares remained unchanged.
The broader 50-share S&P CNX Nifty index of the National Stock Exchange (NSE) climbed 0.79 percent or 37.40 points to 4,747.05. The index touched a high of 4758.25 and low of 4667.50 during intraday trade.
According to market analysts, investors' sentiments were buoyed by the news of strong quarterly earnings posted by Yes Bank and heavy buying of second-rung stocks.
The anticipation was that banks may take a hit because of derivative losses but as of now Yes Bank has not shown any such signs, Raj Bhandari, director at Networth Stock Broking said. Yes Bank results have reduced the fear.
Yes Bank, a small lender, gained 4.65 percent in the market, after reporting a doubling in March quarter net profit to Rs.64.5 crore and saying it had not incurred any derivative losses due to its exposure to the credit market as at the end of March.
Value buying has emerged. If it sustains for a couple of more days we can be sure the bottom has been reached, Bhandari said.
Kotak Securities said in a technical analysis report the medium-term market trend was still down, and investors should buy stocks at lower levels with a view to hold on to them for a year.
Otherwise, it may pain them a lot in the near term, it cautioned.
Elsewhere in South Asia, political turmoil in Pakistan dragged Karachi 100 down 0.45 percent to 15,404.17, after it hit a life high of 15,598.61 during intraday trade. Sri Lanka's Colombo All-Share ended down 0.41 percent at 2,606.97.
The Asian markets continued their downward streak for the second day in a row on speculations that the global credit turmoil will sap corporate earnings. Japan's Nikkei 225 fell 1.05 percent to 13,111.89; Hong Kong's Hang Seng slipped 1.35 percent to 23,984.57; China's Shanghai Composite plunged 5.50 percent to 3413.91; and Taiwan's Taiex ended down 0.06 percent to 8667.93.
South Korea's Kospi lost 1.06 percent to 1754.71; Singapore's Straits Times declined 1.30 percent to 3089.72; and Indonesia's Jakarta Composite plunged 3.10 percent to 2180.09.
Malaysia's Kuala Lumpur Composite looked up, gaining 0.17 percent to 1227.74.