India's key stock index soars more than 5 percent in bargain hunting

MUMBAI, India: India's key stock index jumped 5.4 percent Wednesday, breaking a prolonged spell of deep cuts as investors snapped up bargain buys.
The Bombay Stock Exchange's benchmark index, the 30-stock Sensex, soared 703 points to 13,665 points.
On the broader National Stock Exchange, the 50-company S&P Nifty index rose 197 points, or 5 percent, to 4,093 points.

The rebound in the Indian markets came a day after the Sensex slumped 500 points to 12,962 points, the first time the index had dropped below 13,000 points since April 2007.
Analysts were encouraged by Wednesday's rebound, but they warned that global issues like rising oil prices and inflation still remained a concern.
Oil rose past US$141 a barrel on Wednesday on the New York Mercantile Exchange, and India's inflation for the second week of June rose to a 13-year high of 11.42 percent.

"Macroeconomic factors at the global and domestic level are still a gray zone. Oil prices are still a worry and inflation is not coming down in a hurry," said Rajeev Sampat, director of Parag Parikh Financial Services. "This is a pullback after drifting downward for so long."

But he said there would be another bout of selling if oil prices shot up.

"It's a relief rally, it's too early to say whether we have tested the bottom and are on the way up," said Sampat. "It's too early to term it an end of the bear market."

Investors picked up blue-chip real estate and power shares that have been beaten down sharply on concerns over surging oil prices and rising inflation.

The gains were led by real estate company DLF Ltd., which climbed 15 percent to 424 rupees.

Power utility Reliance Infrastructure Ltd. jumped 12.6 percent to 791 rupees, recouping some of the previous day's losses when the stock fell 10.5 percent.

Oil company Oil & Natural Gas Corporation, or ONGC, rose 8 percent to 855 rupees, engineering firm Larsen & Toubro Ltd. gained 7.3 percent to 2,297 rupees and automaker Mahindra & Mahindra Ltd. advanced 6.6 percent to 469 rupees.