Paying no heed to current uncertain situation following worsening Iraq crisis, the benchmark S&P BSE Sensex spurted by 331 points to close at 25,521.19 on fag-end buying on positive statement by RBI governor amid firm European trends, snapping two-session of fall.

RBI governor Raghuram Rajan today said that the country is ready to deal with any external shocks arising due to ongoing Iraq crisis on the back of narrowing current account deficit (CAD) and strong forex reserves.

On inflation, he commented that we are watching inflation situation and food prices may come down with appropriate food management by the government, but showed concern over the rising global crude oil prices and weakening the rupee value.

The BSE 30-share gauge resumed almost stable and moved in a narrow range till 2:00 pm, but a sudden gust of buying after mid-session pushed the sensex to settle at 25,521.19, showing a rise of 330.71 points or 1.31 pct. In two-session of losses, it had plunged by 385.73 points or 1.51 pct.

The wide-based 50-issue CNX Nifty of the NSE also bounced back by 98.15 points or 1.30 pct to 7,631.70.

Smart rise in index-based counters like RIL, ICICI Bank, ONGC, L&T, SBI, Axis Bank, Tata Motors, HDFC Bank, SSLT, Bharti Airtel, Coal India, BHEL, Gail India and Maruti Suzuki mainly added to the sensex rise.

Buying was so strong that 11 out of 12 sectoral indices closed with gains while only FMCG finished with minor losses.

Oil&Gas, banking, capital goods, power and metal indices were at the forefront.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 194.10 crore yesterday as per provisional data from the stock exchanges. .

Mr. Jignesh Chaudhary, Head Of Research, Veracity Broking Services said," After falling for two days, today local equities traded strong. To start the day indices extended its yesterdays weakness but as the day progressed in the second half indices traded positively and gained almost one and half per cent. Investors will also lookout for the FOMC meet that will begin tonight for two days. Most of experts believe that the Federal Reserve will cut monthly fiscal stimulus by another USD 10 billion to USD 45 billion".

Asian stocks ended narrowly mixed as the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for risk. All eyes now on the US FOMC that begins its two-day meeting today.

Key benchmark indices in Japan, South Korea and Taiwan finished with gains while from China, Hong Kong and Singapore ended with losses.

European stocks, however, were trading firm in their late morning deals on hopes of improvement in German investor confidence in June. The CAC was up by 0.39 pct, the DAX by 0.84 pct and the FTSE by 0.29 pct.

Overall, 24 out of the 30-share Sensex scrips finished higher while others concluded lower. Major gainers were ONGC (4.07 pct), Axis Bank (3.79 pct), SBI (2.91 pct), Coal India (2.89 pct), BHEL (2.84 pct), SSLT (2.76 pct), Gail India (2.55 pct), Reliance Ind (2.39 pct), Icici Bank (2.36 pct), Tata Motors (2.26 pct), Larsen (2.05 pct), Bharti Airtel (1.80 pct), Maruti Suzuki (1.72 pct), Tata Steel (1.38 pct), NTPC (1.24 pct), Tata Power (1.09 pct) and Hindalco Ind (1.02 pct).

However, M&M fell by 1.77 pct followed by Hero Motocorp 0.83 pct, and Dr Reddy's Lab 0.58 pct.

Among the S&P BSE sectoral indices, Oil&gas 2.86 pct followed by Bankex 2.28 pct, CG 1.93 pct, Power 1.88 pct and Metal 1.59 pct.

Mid-cap and Small-cap indices also rose by 1.50 pct and 2.03 pct respectively on good demand from retail investors.

Total market breadth turned positive as 2,046 stocks closed with gains while 953 finished with losses. Total turnover rose to Rs 3,790.44 crores from Rs 3,423.29 crore yesterday.

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