Sensex bounces back from 7-month low, gains 257 points

Mumbai, Feb 11 (PTI)The BSE benchmark Sensex today stageda strong comeback by gaining nearly 257 points on emergence ofbuying of fundamentally strong stocks available at attractivelow levels amid Finance Minister saying that the monthly IIPnumbers do not reflect the correct picture of the economy.

The Bombay Stock Exchange benchmark Sensex, which hadplunged 575 points in the last three trading sessions, bouncedback to close higher by 265.57 points to 17,728.61 asspeculations that shares have become cheap relative toearnings overshadowed a slowdown in industrial production.

Similarly, the broad-based National Stock Exchange indexNifty shuttled between 5,319.45 and 5,177.70, before settlinghigher by 84.20 points to 5,310.

The market received another boost in the later half ofthe session on the back of Finance Minister Pranab Mukherjee''sstatement that the monthly Index of Industrial Production(IIP) numbers do not reflect the correct picture of theeconomy.

The industrial output data, which sank to 1.6 per cent inDecember from 18 per cent in the same period last year.

In volatile trade, in intra day the index dipped to a lowof 17,295.62, a level last seen on June 14.

It later regained strength and touched the day''s high of17,751.56 as banking, consumer durable, auto, capital goodsand realty stocks rose on heavy buying by investors and funds.

Brokers said the benchmark, second-worst performer thisyear after Egypt among 90 indices in the world, has lost 16per cent from Diwali''s record peak as the Reserve Bank ofIndia raised interest rate for the seventh time last month tocurb inflation.

Market leader Reliance Industries rose by 1.21 per centto Rs 910.60 and engineering major Larsen