Markets edge higher, Sensex up 70pts

Markets edged higher after opening on a soft note as investors flocked into beaten down capital goods and banking shares. The Nifty advanced 20 points, at 5,161 and the Sensex was up 70 points, at 17,175.

Overnight, US markets closed on a flat note as investors turned to the sidelines ahead of the Fed Meeting. In Asia, the markets opened on a mixed note, the Nikkei Stock Average was flat, up 0.1%, the Shanghai Composite index advanced over 1% and Hong Kong's Hang Seng fell 0.8%. All eyes are on the outcome of the US Federal Reserve two day meeting. There are expectations that the Fed may announce some for of stimulus to support the flagging economy.

Back in India, on Tuesday, the Nifty future closed above its 30 day high with decent volume participation. Ashish Chaturmohta from IIFL Private Wealth said, “The Nifty futures caps resistance around 5240 levels, sustaining above which can see a further pullback towards 5300-5330. On the downside, 5100 would now act as a psychological support, below which 5050-5020 levels can be seen.”

Foreign Institutional Investors were net buyers of Rs 319 crore, while the Domestic Institutional Investors were net sellers of Rs 318 crore in cash on Tuesday according to the provisional data from the Bombay Stock Exchange.

Among individual stocks Lupin was up almost 2% after it announced the US FDA approval of its first oral contraceptive.

From the Coal and Power space – Gujarat Minerals, NMDC and Neyveli Lignite advanced over 1% each after Green Ministry softened stand on coal mining. The environment Ministry has agreed to discuss coal projects on case-by-case basis.

From the broader markets, the midcap and the smallcap indices were up around 0.4% and 0.3% each.

BSE Capital Goods index was the top gainer, up 1%. Lakshmi Machine surged 2%, L&T and Bharti Electricals advanced around 1% each.

Investors also cashed into the banking counter, ICICI Bank jumped 2%, State Bank of India rallied 1.5% and Kotak Mahindra Bank gained 1.3%.

The BSE Auto index was in the reverse gear, down 0.6%. Maruti Suzuki, Tata Motors and Hero Motor Corp lost around 1% each.

On the Sensex, ICICI Bank, Larsen & Tourbo and HDFC Bank contributed 40 points, while Tata Motors, Infosys and Reliance Industries (0.3-0.9%) were capping gains.

Market breadth was positive 861 stocks advanced for 481 stocks which declined.