Markets have touched fresh intra day highs on the back of strong cues from Asia led by buying amongst index heavyweights and rate sensitive shares.
At 1130 hrs, the Sensex was up 225 points at 16,413 after touching an intraday high of 16,442. The Nifty gained 71 points to 4,945 after touching the intraday high of 4955.
Rate sensitive shares such as banks and autos were up as December headline inflation which fell to a two-year low of 7.47% may prompt the Reserve Bank to cut policy rates at its policy review meet on January 24.
On the global front, Asian markets are trading firm post Chinese fourth quarter GDP data. China's gross domestic product for the Oct-Dec quarter, although at a 2.5-year low, was better-than-expected at 8.9%. Shanghai, Nikkei and Straits Times are up almost 1%. Hang Seng has gained nearly 2%. Kospi and Taiwan are up 1.2-1.5%.
Back home, BSE Capital Goods and Metal indices have surged by nearly 3% each. Sectors like Realty, Auto Oil & Gas, Power and PSU have gained by nearly 2% each.
Index heavyweight RIL has surged by almost 3%. Infosys has gained by nearly 1% on short covering after the stock was beaten down last week as the company had lowered its dollar revenue growth guidance for the fourth quarter.
From the Capital Goods space, L&T and BHEL have spurted by nearly 3%.
Metal shares have gained on better-than-expected Chinese economic growth data. China is the world's largest consumer of copper and aluminum.
Hindalco Industries, Sterlite, Tata Steel, Jindal Steel & Power, Coal India, JSW Steel, Hindustan Zinc have spurted between 2-4.5%.
Maruti Suzuki is the top Sensex gainer, up by nearly 6%. The company has raised prices of all its vehicles by 0.3-3.4% due to adverse foreign exchange movements and a rise in commodity prices, a company source told Reuters on Tuesday. M&M, Tata Motors and Bajaj Auto have gained by almost 2% each.
Bank shares are up on hopes of a rate cut by RBI after December headline inflation fell to a 2-year low 7.47%. HDFC Bank, ICICI Bank and SBI were all up 1% each. In the realty pack DLF has zoomed by nearly 3%.
Among other software TCS has gained ahead of Q3 earnings today. HDFC Securities is of the opinion that volumes of the software major are likely to grow 3% sequentially with flat pricing.
HCL Technologies has advanced over 3% after the company announced robust Q2 earnings. Wipro has spurted by nearly 2%.
In the broader markets, the small cap and the midcap indices are performing in line with benchmark indices, surging by nearly 1% each.
The market breadth in BSE remains healthy with 1,698 shares advancing and 719 shares declining.