Firm trades continue, Sensex up 270pts

The markets continued to trade firm in late-morning trades on the back of positive cues from global peers after reports that Europe will be able to expand the bail-out fund. The Nifty has advanced 80 points at 5,118 and the Sensex has gained 268 points at 17,017. Reports suggest that France and Germany have reached a deal to enlarge the Euro-zone bailout fund to $2.5 trillion in a bid to contain the region's debt crisis.

Earlier in the day, the BSE benchmark index touched a low of 16,874 and a high of 17,031.

Meanwhile, Moody's, on Tuesday, cut Spain's sovereign ratings by two notches, citing high levels of debt in the banking and corporate sectors.

Analysts recommend investors to buy on dips as the index will face resistance on every rally. “Expect selling pressure at higher levels, unless Nifty is able to close above the 5,200 mark. If Nifty is able to cross 5,200, the next level of resistance comes at 5,325. On the downside, support is at 4960,” said Amit Chheda, Head of Equity at Inventure Growth and Securities.

Among the sectoral indices, BSE Realty, Bankex and Auto indices are leading the gains, up nearly 2% each.

Yes Bank, Axis Bank, IDBI Bank, HDFC Bank and Federal Bank, up 2-3% each, are the prominent gainers among the financials.

From the Auto sector, Hero MotoCorp has rallied 5% to Rs 2,082 after reporting a better-than-expected 19.3% year-on-year growth in net profit at Rs 604 crore in the second quarter ended September on the back of a robust volume growth. India’s largest two-wheeler maker had reported a net profit of Rs 506 crore a year ago.

On the Sensex, Hero MotoCorp, DLF, Wipro, Tata Motors and JP Associates are the prominent gainers, up 3-5% each. Hindustan Unilever, down marginally, is the only loser from the pack.

Among individual stocks, Cronimet Alloys India has soared 9% to Rs 151 on reports that metals and energy giant Glencore International is in talks to buy 24% stake in the company.

GVK Power & Infrastructure has gained nearly 2% after the company said its unit – GVK Airport HoldingsPvt. Ltd. – has acquired 108 million shares in Mumbai International Airport Pvt. Ltd. (MIAL) from Bid Services Division (Mauritius) Ltd.

The overall market breadth is positive as 1,690 stocks have advanced against 664 declining ones, on the BSE.