Markets erase gains; Hindalco, NTPC dip 3-5%

Benchmark indices have erased its early gains weighed down by metal stocks amid FII selling as investors remain cautious on a sharp spike in bond yields in developed markets. 

At 11.05 AM, the Sensex is down 11 points at 26,885 and the Nifty has lost 2 points at 8,125 mark

Top 5 losers on the BSE are NTPC, Hindalco, HUL, Bajaj Auto,TCS and have shed up to 5%.

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(updated at 11.10 AM)

The markets have surged this morning, thanks to the rally in index heavyweights from the banking, auto and oil space.

At 10.30 am, the Sensex was trading comfortably above the psychologically crucial 27,000 mark at 27,227, higher by 350 points or 1.3% and the Nifty had raced past the technically important 8,200 level at 8,235, up 108 points.

The broader markets have also rebounded this morning, with the midcap index gaining 1.7% at 10,452 and the smallcap index adding 1.7% at 10,911 respectively.

The markets have been on a wild ride in the past two weeks. The Sensex had gained 479 points on Monday last week, only to plunge 723 points on Wednesday, followed by a 506 point rally on Friday. The markets started this week on a firm footing, with the Sensex rising 402 points on Monday, only to plunge 630 points on Tuesday. One would have to see how things pan out in this trading session and through the week. The market participants would also be keeping an eye on Nifty's 200-day moving average (DMA) of 8,289 as this could determine the immediate trend, going forward.

Lupin, Adani Enterprises and Emami are likely to announce their March quarter results during the day.

RUPEE

The rupee has opened flat at 64.17 per dollar this morning as against the previous day's close of 64.17. The US dollar has slumped against the euro and swiss franc after a spike higher in German bond yields overshadowed a rise in US treasury yields and led to a demand for European currencies.

SECTORS AND STOCKS

All the sectoral indices are in the green. Banking, auto and oil stocks are in the limelight this morning.

Banking shares have surged after the Consumer Price Index (CPI)-based inflation fell to a four-month low in April and is likely to increase the clamour for the Reserve Bank of India (RBI) to cut interest rates in its next monetary policy. Banking heavyweights such as ICICI Bank, Axis Bank and SBI have gained 1-2% each. In the larger banking space, Bank of Baroda, Bank of India, Canara Bank and Yes Bank have also added 1-2% each.

The auto stocks are having a good session of trade, with Hero MotoCorp, M&M, Maruti and Tata Motors adding 1-3% each.

In the oil and gas space, ONGC, Gail and Cairn India have added 1-2% each. And index bellweather RIL has gained nearly 1% at Rs 875.

Shares of the companies that have been included in MSCI India Index have also rallied on the bourses. Bharat Forge, Bharti Infratel, Container Corp of India, Eicher Motors, Lupin, Marico, Shree Cement and UPL have rallied between 2% and 7% each on the National Stock Exchange (NSE).

Select metal stocks are trading weak, though, with Vedanta and Hindalco shedding around 2% each.

The market breadth is strong. Out of 2006 stocks traded on the BSE thus far, there are 1433 advancing stcosk as against 478 declines.