Markets catch up with global rally

Markets caught up with the global rally after a holiday on Thursday on account of Diwali. The Sensex, after touching a high of 17,908 moved near that level for most part of the day. The index finally ended with a gain of 516 points at 17,805. Nifty soared 159 points at 5,361.

European markets, opened on a soft note today. After gaining as much as 1% in the day, CAC and DAX erased all gains. Asian stocks ended their best week in nearly three years. The Nikkei was up 1.3% at 9,050. Hang Seng gained 1.6% to 20,019. The rally in Asian markets followed after European leaders convinced bondholders into accepting 50% writedowns on Greek debt.

US stocks soared on Thursday as an agreement by European leaders to help contain the region's two-year debt crisis lifted a cloud hovering over markets. On top of that, first-time jobless claims decreased by 2,000 to 402,000 in the week ended October 22, Labor Department figures showed on Thursday in Washington.

"We feel that the European deal which is out is a temperary solution, RBI stance of probable last rate hike, in all these events we need to wait and watch how do they pan out. Also with continuing concerns of inflation and not so encouraging results we think we need to have a wait and watch policy for some time now. On global front the G20 meet next week will be watched and on domestic front the other economical data like inflation, IIP data should be watched," said A K Prabhakar, Senior Vice President Equity Research, Anand Rathi.

All the sectoral indices gained in trades. BSE metal index jumped 6.3% to 12,142 after the Union Cabinet approved a national manufacturing policy to increase manufacturing's share of national output. This is likely to create millions of jobs and add capacity to sustain brisk economic growth through the next decade.

Hindalco soared 12% to Rs 142. Steel stocks - JSW Steel, Jindal Steel, Tata Steel and SAIL rose 6-9% each. Sterlite added 8.8% at Rs 133.

Banking shares rose smartly, recovering from its slide folloing the RBI policy on Monday. The bankex was up 3.7% at 11,372. The RBI, in a bid to control inflation, has raised key rates by another 25 basis points.

IDBI Bank and ICICI Bank from the banking space soared 7% each. Union Bank, Axis Bank, Federal Bank and Canara Bank were also in green.

The realty and auto indices also moved up with 3-5% gains. Market heavyweight, Reliance, added, 2.8% at Rs 898.

NHPC Ltd announced a 40% jump in its net profit at Rs 966 crore for the quarter ended September 2011 as compared to Rs 690 crore a year ago in the corresponding period. The stock surged 4.6% to Rs 24.80.

Shares of oil exploration companies such as Oil and Natural Gas Corporation (ONGC), Cairn India, Hindustan Oil Exploration and Aban Offshore have rallied on the bourses after crude oil prices crossed $90 mark amid economic data indicating the strongest US economic growth in 12 months and progress with the sovereign debt crisis in the euro zone. Shares of ONGC jumped 3% to Rs 285. Hindustan Oil Exploration gained 7.3% while Cairn India added 2% in trades.

Jindal Poly Films soared 8% to Rs 233 after the company proposed to convene a board meeting on October 31, 2011 to pass a revised resolution so as to enable the company to start the buy back in compliance of the provisions of the SEBI.

Meanwhile, Maruti Suzuki slipped 2% to Rs 1,128. Bajaj Auto was flat at Rs 1,754.

BSE market breadth was positive. Out of 2,959 stocks traded, 1,728 shares advanced while 1,139 shares declined.