BSE Sensex up 1.7 percent as Reliance stock surges

On Monday, the Sensex opened up 1 percent at 17,524, but fell as much as 1.2 percent to 17,138, dragged down by weak global cues and concerns over the economic slowdown in the US.

However, a strong rally by Sensex heavyweight, Reliance Industries Ltd (RIL), pulled the Sensex up to a high of 17,674 and helped it to finally settle at a comfortable level.

Reliance Industries, which accounts for about 15 percent of the main index, added 5 percent to Rs.2,551.70 on strong buying by institutional investors.

India's largest private sector bank, the ICICI Bank recovered from early falls to close almost 1 percent up at Rs.1,110.05, while State Bank of India (SBI) ended 0.6 percent up at Rs.2,127.55.

Reliance Power, which made a dismal debut early this month, rose 8.1 percent on Monday to its highest close at Rs.450.40 after the company announced a 3-for-5 bonus share issue to boost shareholders' confidence.

Parent company Reliance Energy moved up nearly 4.5 percent to Rs.1,623.

Maruti Suzuki and Wipro rallied over 4 percent each to Rs.798 and Rs.440, respectively.

NTPC and Satyam gained 2.7 percent each at Rs.203 and Rs.450, respectively.

Hindalco and Ranbaxy moved up 2.5 percent each to Rs.197 and Rs.420, respectively.

India's No.2 IT company, Infosys Technologies advanced over 2 percent to Rs.1,613 while FMCG major ITC moved up 1 percent to Rs.202.

Other major gainers were ACC Ltd (up 5.7 percent), Ambuja Cements (4.4 percent) and Grasim (4.2 percent).

However, amid merger talks, HDFC Bank, which offered $2.4 billion in shares for smaller Centurion Bank of Punjab, showed a disappointing performance, its shares falling 3.5 percent to Rs.1,422.70.

Auto majors Bajaj Auto and Mahindra & Mahindra also ended in the red.

Except for the prime index, the broader market experienced negative trading as out of 2740 shares traded, 1611 declined, 1063 advanced and 66 remained unchanged.

The broader 50-share S&P CNX Nifty of the National Stock Exchange (NSE) added 1.76 percent or 90 points to 5,200.70.

"We are positive about the long-term growth prospects as long as reforms continue on the private and public sector. In the short-term, India will see slowdown in growth rates over next couple of years, but on valuation basis it is still attractive," said Paul Sheard, managing director and global chief economist, Lehman Brothers.

Elsewhere in the region, Karachi's 100-share index reversed early gains to edge down 0.22 percent at 14,947.68, but Colombo's All-share index was 0.41 percent higher at 2,520.98.

In Asia, barring Hong Kong's Hang Seng, most of the other Asian market indices were up by 0.4-2.4 percent on the back of recovery on Wall Street last weekend following news about the rescue plan for a US bond insurer, Ambac Financial.

European stocks closed higher in the range of 1-1.6 percent.