BSE Sensex rebounds 3.3 pct, Reliance up 5.5 pct

By Ami Shah

MUMBAI (Reuters) – The BSE Sensex rebounded 3.3 percent on Wednesday, its biggest rise in more than three and a half months, supported by the government's assurance fiscal stimulus would be maintained and a world stocks rally.

Finance Minister Pranab Mukherjee said late on Tuesday the government will maintain its fiscal stimulus due to uncertainty arising from a poor monsoon and the global outlook, as data showed the summer crop could post a bigger-than-expected fall.

Energy giant Reliance Industries rose 5.5 percent to 1,920.65 rupees, erasing most of its 5.7 percent fall on Tuesday.

A legal dispute between billionaire Mukesh Ambani-led Reliance Industries and Reliance Natural Resources, controlled by younger brother Anil, was disrupted on Wednesday when a judge withdrew from a Supreme Court hearing, citing

potential conflict of interest.

The 30-share BSE index closed up 3.29 percent, or 507.19 points, at 15,912.13, after falling 8.4 percent over the previous six sessions. Twenty-seven of its components gained.

Ved Prakash Chaturvedi, managing director of Tata Asset Management, said the market's slide over the past week was exaggerated was now responding to positive cues from overseas.

"Investors have entered at lower levels believing in the fundamental strength of our market," Deven Choksey, managing director and CEO of K.R. Choksey Shares.