BSE Sensex climbs 156 points on positive budget outlook

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Led by Reliance Industries (RIL) and Infosys Technologies, India's prime index rose to 17,806.19, its highest close since Feb. 19, with nineteen components ending in the green. The Sensex had touched the day's high of 17,860.10 and a low of 17,678.74 points.

Sensex heavyweight Reliance Industries gained 0.9 percent to Rs.2575.75 while India's No.2 IT company Infosys Technologies rose 3 percent to Rs.1662.10.

Reliance Energy rose 4.6 percent to Rs.1697.25 after the utility said its board would meet next week to consider a share buyback.

Shares of HDFC Bank, which fell 3.5 percent to Rs.1422.70 on Monday, bounced back to recover 2.3 percent to Rs.1455.

On Monday, HDFC Bank unveiled a $2.4 billion all-stock deal to acquire smaller Centurion Bank of Punjab.

Other shares that gained were oil companies like Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp that rose between 4.2-5.4 percent after the rail budget cut freight rates by 5 percent on petrol and diesel.

State-run power equipment maker Bharat Heavy Electricals Ltd (BHEL) rose 4.6 percent to Rs.2180.55 after it won a $270 million order to set up a power plant in the western state of Gujarat.

Among sectoral indices, the BSE Capital Goods index was the best performer, rising 324.09 points at 16,124.36, followed by the BSE Metal index, which rose by 270.85 points at 16,108.01.

The BSE Realty index surged by 247.18 points at 10,016.49, while the BSE Oil & Gas index climbed 157.38 points at 11,214.76.

The market breadth at BSE was positive as 1,654 shares advanced and 1,072 declined on volume of 251.4 million shares.

The broader 50-share S&P CNX Nifty of the National Stock Exchange (NSE) added 1.33 percent to close at 5,270.05. It touched the day's high of 5,281.20 and a low of 5200.80 points.

According to trade analysts, investors' confidence was buoyed by the annual rail budget, unveiled Tuesday, which cut passenger fares and freight rates and stressed on plans to modernize the rail network.

Investors are also looking forward to the main budget for the fiscal year beginning in April, which is expected to give tax breaks to individuals and companies and step up spending to woo voters ahead of national elections that will be due by early 2009.

The main budget will be announced on Friday.

"There has been certainly some improvement in the sentiment as global markets are doing well," said Amitabh Chakraborty, president of equities at Religare Securities.

"People expect at least there will be no negative surprise in the budget, it being the last budget before elections," he added.

Elsewhere in the region, Karachi's 100-share index gained 0.73 percent to 15,056.27, and Colombo's All-share index inched up 0.26 percent to 2,527.62.