Markets edge higher led by IT

Sensex gains led by Infosys and TCS

Markets continued to trade firm in noon trades on Monday after government data showed lower-than-expected wholesale price inflation. The gains were led by  software and financials.

At 12:50PM, the 30-share Sensex was up 163 points at 19,827 and the 50-share Nifty was up 45 points at 5,997.

The annual wholesale price inflation (WPI) eased to 7.18% in December, government data showed on Monday.

Analysts had expected wholesale prices, India's main inflation gauge, to increase to 7.40% year-on-year, faster than an annual rise of 7.24% in November.

Asian stocks surged on Monday led by China's Shanghai Composite which surged over 3%. Hang Seng and Kospi were both up 0.5% each while Straits Times was the sole loser in the Asian region. Japan's stock markets were closed on account of Coming of Age day.

Rate sensitive sectors were among the top gainers on hopes that easing inflation would help the central bank to cut rates at its policy meet during the end of the month.

The sectoral indices on the BSE were led by Realty, IT, Consumer Durbales and Bankex.

Infosys extended gains on Monday and was up over 3% after the company on Friday surprised the street with better-than-expected results for the third quarter ended December 2012 (Q3) and also raised its full year guidance.

TCS was up over 2% at Rs 1,335 ahead of its third quarter earnings to be release after market hours today. "We belive TCS would find it difficult to move above 1370 kind of levels, also looking at options data not much big movement is expected on TCS counter after the resutls. So from our understanding one should look to book profits near 1370 levels," said Navneet Daga, derivative analyst, KR Choksey Securities.

The financials were led by ICICI Bank up 1.6% followed by HDFC and SBI. Other Sensex gainers include, ITC and ONGC.

Auto shares witnessed profit taking at higher levels after gains last week. Maruti Suzuki, Mah & Mah, Bajaj Auto and Tata Motors were down 0.3-1.9% each.

In the broader markets, the BSE Mid-cap was up 0.5% while the Small-cap index was up 0.3%.

Market breadth was positive with 1,414 gainers and 1,172 losers on the BSE.