Key share indices have extended gains in noon trades and are currently trading near their day's highs on reports that the US Senate has approved the Bill to avert 'fiscal cliff'. Gains in domestic markets were led by consistent buying in Realty, Metal, Capital Goods and banking shares.
The US Senate on Tuesday, two hours after a December 31 deadline had lapsed, approved legislation aimed at averting the "fiscal cliff" by stopping most tax hikes and across-the-board spending cuts that were due to begin with the new year.
The House of Representatives still must approve the measure, possibly on Tuesday.
By 1300 hrs, the Sensex was up 171 points at 19,598 and the 50-share Nifty gained 51 points at 5,956. The Sensex and the Nifty reached an intra-day high of 19,618 levels and 5,960 mark, respectively.
The rupee stabilised further against the American currency in the late morning trade by surging 24 paise to 54.75 per dollar on persistent selling of dollar by banks and exporters on the back of sustained capital inflows despite firm dollar overseas.
On the sectoral front, BSE Realty index has surged over 2% followed by counters like Metal, Banks, Capital Goods, PSU, Power, Consumer Durable, Auto, FMCG and Healthcare, all gaining between 1-2%. Infact, all the major BSE sectoral indices are trading in green zone.
Shares of interest rate sensitive sectors mainly banking and real estate are in focus on optimism of Reserve Bank of India (RBI) easing monetary policy this month.
Goldman Sachs forecasts the repurchase rate, held at 8% since April, will be lowered to 7.5% at the next review on January 29, while BNP Paribas SA sees a 25 basis point reduction. Eleven of 20 analysts surveyed by Bloomberg see a 50 basis point decrease by March 31, the report suggests.
Among the individual stocks, Unitech, Bombay Dyeing and Indiabulls Real Estate from realty and State Bank of India, ICICI Bank, HDFC Bank, Canara Bank and Bank of India from banking are trading higher by 1-3%.
Capital Goods majors like L&T and BHEL have risen between 1-2%.
Metal shares gained on upbeat Chinese manufacturing data from HSBC which was announced yesterday. China is the world's largest consumer of copper and aluminum. JSPL is the top Sensex gainer, up almost 3%. Hindalco, Sterlite, Tata Steel and Coal India have surged between 1-2.5%.
Other prominent gainers include Tata Motors, Bharti Airtel, M&M and HUL.
Among other shares, Indian Overseas Bank is trading higher by over 3% at Rs 88.40, extending its previous day around 1% gain, after its board approved fund raising plans via rights issue or a private placement basis.
The market breadth in BSE remains healthy with 1,756 shares advancing and 843 shares declining.
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