Flagging fortunes at the capital market were reversed on Tuesday, as hectic short covering by operators in derivatives pushed the benchmark Sensex up by 147 points to over a four-month high of 12,321.19.
Bank shares hogged the limelight following a State Bank of India statement that interest rates were softening. Banking sector also attracted heavy interest after RBI Deputy Governor V Leeladhar on Tuesday said the final guidelines on Basel-II implementation would be issued in a couple of weeks.
The Sensex ended sharply up at 12,321.19, up by 147.28 points or 1.21 per cent over Monday's close of 12,173.91. The index touched the intra-day low of 12,160.58 during the mid-session.
Similarly, the National Stock Exchange's (NSE) S&P CNX Nifty surged up by 48.30 points or 1.37 per cent to 3,571.75 from previous close of 3,523.45.
Activity was largely confined to frontline stocks in view of approaching end of derivatives contract.
Foreign Institutional Investors (FIIs) as well as retail investors were engaged in rolling over positions to October contract of the Futures & Options (F&O), brokers said.
Operators began covering their short positions two days ahead of expiry of futures contract on September 28.
Foreign Institutional Investors (FIIs), which have been heavy sellers in derivatives for the last couple of days, too were seen covering short positions in the futures.
Reflecting sharp rally in banking counters, the sectoral BSE-Bankex flared up by 110.60 points or 1.94 per cent to end at 5,797.72 against Monday's close of 5,687.12.
Of the total 2,593 traded shares, 1,240 counters scored handsome gains while 1,243 others recorded losses.
The trading volume remained low at Rs 3,500.73 crore. RIL was the most active scrip with highest turnover of Rs 168.49 crore followed by Mah Gesco (Rs 152.11 crore), Unity Infra (Rs 142.20 crore), Action Construction Equip on the first day of listing (Rs 115.24 crore) and Tulip IT (Rs 102.89 crore).
The broad-based BSE-100 Index shot up by 64.68 points to 6,242.65 from previous close of 6,177.97.
The BSE-200 Index and the Dollex-200 were quoted sharply higher at 1,472.37 and 533.94 at close compared to last close of 1,457.82 and 528.46 respectively.
The BSE-500 Index jumped by 43.34 points to 4,663.19 from previous close of 4,619.85 and the Dollex-30 ended up at 2,203.37 from 2,176.20.
SBI spurted by 27.60 to 998.80, ICICI Bank by 17.85 to 678.00, HDFC Bank by 9.70 to 888.20, HDFC by 28.45 to 1419.80, Tata Motors by 10.70 to 857.10, Maruti by 19.70 to 946.10, Bajaj Auto by 35.75 to 2902.25, Hero Honda by 15.55 to 787.80, Infosys Tech by 14.25 to 1831.50, Satyam Computer by 6.50 to 834.25, TCS by 18.60 to 1043.80, Wipro by 12.05 to 526.40, ACC by 9.65 to 975.20, Bharti Airtel by 3.95 to 478.00, BHEL by 51.35 to 2377.05, Cipla by 1.30 to 260.55, Grasim by 23.20 to 2492.40, HLL by 5.90 to 258.65, L&T by 8.10 to 2618.35, ONGC by 10.25 to 1177.80, Ranbaxy by 3.00 to 416.95, Rel Com by 4.50 to 346.10, REL by 3.45 to 463.50 and Tata Steel by 4.95 to 512.65.