Sensex rises most in four years; ICICI jumps

By Sumeet Chatterjee

BANGALORE (Reuters) - The Sensex rose 7.4 percent on Monday, snapping a five-day losing run with its biggest rise in more than four years as the government sought to reassure investors it was working to shield India from the global crisis.

The gains were led by a surge in ICICI Bank and helped by rallies in overseas markets after policy makers around the world took new and drastic steps to rescue banks and prevent the global economy from sinking into recession.

However, doubts remained about the strength of the rise.

No. 2 lender ICICI Bank rose 16.75 percent to 425.10 rupees, having risen nearly 25 percent earlier, helped by the finance minister's comments the government was working to improve liquidity in the banking system and after its chief executive said on Monday deposits with the bank were safe and it had a cushion to take domestic and overseas shocks.

ICICI has been hammered by investor concerns about its exposure to the global crisis. Before Monday's surge, its shares had fallen more than 70 percent in 2008.

The 30-share BSE index ended up 7.42 percent, or 781.24 points, at 11,309.09, its biggest percentage rise since May 18, 2004, as it pared some of the previous week's fall of nearly 16 percent. All but two of its components gained ground.

"It's a temporary pullback rally, triggered by the positive international markets and the reassurance from the finance minister about the liquidity situation in the country," said Gajendra Nagpal, chief executive of Unicon Financial.

Finance Minister Palaniappan Chidambaram said on Monday the government, the central bank and the stock market regulator were coordinating on an hourly basis regarding the fallout of the global financial crisis on the Indian market.