Sensex bounces back by 177 pts to fresh 32-month high

With a seven-day rally broken by an 84 point decline in yesterday's choppy session, the Sensex bounced back today by adding 177.26 points to 19,594.75, a level last seen in January, 2008. Similarly, the broad-based National Stock Exchange index Nifty rose by 56.25 points to 5,884.95, within sight of the 5,900-mark.

Marketmen said that reports of higher advance taxes paid by corporates helped investors overlook the Reserve Bank of India's hike of borrowing and lending rates yesterday to tighten the monetary policy, making loans more expensive. A firming trend in the Asian region and a higher opening in Europe further drove the market upward.
The most valuable entity on the Sensex, Reliance Industries, rose by Rs 25.85 to Rs 1,026.75 on reports that the energy major is in talks with US-based Chesapeake Energy to buy a stake in the Eagle Ford shale gas project.

The second most valuable firm by weightage, Infosys Technologies, led the gains in the software export sector by gaining Rs 6.30 to Rs 2,974.10. The two stocks together carry nearly 23 per cent weightage on the market. The consumer durable sector index gained the most by rising 2.10 per cent to 6,154.17 as stocks of Titan, Whirlpool and Vip industries recorded handsome gains.

The healthcare sector index was the second-best performer by rising 2.05 per cent to 5,842.24 as Elder Pharmaceuticals shot up by Rs 20.95 to Rs 434.95 following UK based NeutraHealth's approval of a takeover offer by the Indian drug-maker.

With buying activity spread over a wide front, the mid-cap sector index rose by 1.43 per cent to 8,104.28 and the small-cap index by 0.93 per cent to 10,238.91.