The benchmark indices chose to turn a Nelson's eye to the positive cues emanating from global peers. On a day when the Asian markets had a healthy session of trade and European markets were also looking in a robust state, the bourses back home remained mired in the confusion that has been their Archilles heel for a prolonged period of time. The Sensex ended at 18,308, higher by 42 points and the Nifty shut shop at 5500, up 17 points. The broader market space did somewhat better; the midcap space rallied by 0.6% at 6959 and the smallcap index gained 0.3% at 8344.
On the global front, markets across Asia had a good session. The Seoul, Taiwan and Nikkei indices gained more than a percent each. And the European markets, including the FTSE, CAC and DAX are also looking good in mid-day trades, having surged in the region of around a percent each.
The bourses back home showed some signs of breaking free from their moribund state, with the BSE benchmark surging in three-figure mark in early trades. But the higher inflation numbers put paid to any hopes of a sustained intra-day rally. The wholesale price index (WPI) inflation rose to 9.06% in May compared with the annual rise of 8.66% in April, driven by higher prices of manufactured goods.
Meanwhile, the chairman of Prime Minister's Economic Advisory Council C Rangarajan said India's economic growth in the 2011-12 fiscal is likely to be about 8.5%, lower than Budget projections.
Reliance Infra topped the gainers list on the BSE, racing ahead by 2.3% at Rs 555. Bajaj Auto gained 2.2% at Rs 1372 and Jindal Steel added 1.9% at Rs 643.
Banking stocks also had a decent time ahead of the credit policy scheduled on Thursday. The central bank is expected to raise rates by 25 basis points to rein in inflation. ICICI Bank jumped 1.5% at Rs 1,055, SBI gained 0.6% at Rs 2,233 and HDFC Bank added 0.4% at Rs 2,381.
OMCs, including BPCL, HPCL and Indian Oil Corporation, ended flat after comments by the oil minister S Jaipal Reddy that a panel of ministers will meet shortly to discuss a possible hike in diesel, cooking gas and kerosene prices. Jaipal Reddy had met Prime Minister Manmohan Singh earlier to push for an early decision on raising diesel and domestic LPG prices.
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On the other hand, Tata Motors continued its bad run, weakenening by 2.8% at Rs 984, on the BSE. Hindalco shed 2% at Rs 176 and HDFC lost 1.4% at Rs 648. And index heavyweight Reliance Industries declined 1.4%, extending the nearly 2% slide of the previous session, triggered by reports that oil regulator -- Directorate General of Hydrocarbons (DGH) refused to accredit three natural gas discoveries made by the company at its KG-D 6 block. And Housing Development Finance Corporation fell 1.4% at Rs 618 after 17.5 million shares or 1.12% of equity changed hands at Rs 643 on the BSE. The identity of the buyers and sellers was not immediately known.
The market breadth was strong. Out of 2964 stocks traded on the BSE, there were 1620 advancing stocks as against 1210 declines.