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Sensex closes 781 points up on FM assurance

Posted by Yogesh on Tuesday, 14 October, 2008

MUMBAI: Sensex on Monday bounced back 781.24 points to close well above 11000 following positive sentiments in the global market as world governments have pulled up their socks to fight the liquidity crisis that has hammered their economy and caused fear of recession.

Shares of Axis Bank on Monday surged 20 per cent on strong Q2 net profit growth coupled with assurances from Finance Minister P Chidambaram on likely measures to ease the liquidity in the banking system.

Most of the stocks, which were battered Friday, bounced back as the market cheered the consolidated efforts made by the government to boost market sentiment where were weighed down by weak global cues for last one week.

“It was a good day for the banks, especially Axis and ICICI, as it was reiterated from all sides that Indian banks have good financial positions and are less exposed to the present financial turmoil,” said a senior dealer with leading broking firm.

Axis Bank shares gained 20 per cent to end at Rs 662.90 on strong net profit growth of 77 per cent to Rs 403 crore for the second quarter of FY-09 compared to Rs 228 crore in the corresponding quarter of previous year. It was the top gainer among banks. ICICI Bank followed with a gain of 16.75 per cent to close at Rs 425.10 on repeated assurances by the bank as well as finance minister and RBI about its good financial health.

Strong rumours that some of the private banks are likely to go bust due to their excess exposure to foreign market had battered ICICI Bank last week, pulling it down to more than three-year low at Rs 326. However, the bank made repeated efforts to assure investors about its strong fundamentals and on Sunday the bank even filed FIR against some brokers and sub-brokers responsible for spreading rumours in the market.

The Bankex of Bombay Stock Exchange rose over 12.30 per cent on the hopes that the efforts being made by the government and RBI would help the banks to sail out of the financial crisis.

Marketmen were of the view that Monday’s strong rally was due to short covering from the lower levels and market is likely react on global sentiments. Source The Times of India

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