RIL plays saviour, Sensex gains 150 points at close

The 4% rally in Reliance Industries' share price finally helped Equity benchmarks recoup all its losses. RIL's recovery, in turn, was led by confidence expressed by British Petroleum. Short covering in European markets post deep cut yesterday too improved sentiments. The 30-share BSE Sensex recovered from yesterday's loss - rose 149.48 points to close at 16,862.81 and the 50-share NSE Nifty jumped 47.10 points to end at 5,064.30.

Looking at the market's resilience over the last two or three sessions, Mehraboon Irani of Nirmal Bang Securities said it may try to go up  to 5,100 or even 5,200 level. According to him, however, 4,700 is a good stoploss.

On the global front, Britain's FTSE gained more than 1%. Among other European markets, France's CAC and Germany's DAX went up 0.5% each. Some Asian markets too showed recovery in late trade - Hang Seng gained 0.5%; Straits Times and Shanghai closed flat.

On the home turf, heavyweight Reliance Industries surged 4% as country head of BP said he was confident of increasing gas production from KG D6. BP took 30% stake in RIL's 21 oil and gas blocks for USD 7.2 billion. "We will set up gas JV with RIL in 2 months. JV will import and sell gas in Indian markets," he said.

Announcement of FPO did not impact ONGC negatively. Generally FPO announcements have met with negative investor sentiments, but this time the stock may have priced in the news's negativity yesterday itself. The company's 42.8-crore shares FPO will open for subscription during September 20-23, 2011. Today the stock gained 1.56%.

Technology, capital goods, cement, private banks, metal and select auto (only 4-wheeler) stocks helped the bounce back. However, the sell-off in Anil Dhirubhai Ambani Group (ADAG), power, telecom and realty stocks has limited the upside.