The markets opened on a firm note following positive cues from the global markets after reports that Europe will be able to expand the bailout fund. The Nifty advanced 40 points, at 5,079 and the Sensex gained 145 points, at 16,895.
Reports suggest that France and Germany have reached a deal to enlarge the Euro-zone bailout fund to $2.5 trillion in a bid to contain the region's debt crisis.
Asian shares rose on Wednesday, but gains were capped by a cut to Spain's sovereign credit rating from Moody's Investors Service that kept investors' risk appetite in check. The Japan’s Nikkei stock average opened up 0.5%, the Hang Seng added 1.2% and the Shanghai Composite was trading flat.
Moody's, on Tuesday, cut Spain's sovereign ratings by two notches, citing high levels of debt in the banking and corporate sectors.
Back in India, analysts recommend investors to buy on dips as the index will face resistance on every rally. “Expect selling pressure at higher levels, unless Nifty is able to close above the 5,200 mark. If Nifty is able to cross 5,200, the next level of resistance comes at 5,325. On the downside, support is at 4960,” said Amit Chheda, Head of Equity at Inventure Growth and Securities.
Among individual stocks, Hero MotoCorp was up 4% after it reported 19.39% jump in its net profit for the quarter ended September 30 at 603.62 crore. The results were announced yesterday after market hours.
Realty index was the top gainer, up 2%; Anant Raj Industries, up 4%, followed by DLF and Prestige Estates, up 3% each.
BSE Auto index was in the top gear, up 2%; Tata Motors advanced 3%, followed by Bajaj Auto and Ashok Leyland, up 2% each.
Major contributors to the Sensex were Reliance Industries, ICICI Bank and HDFC Bank, up over 1% each. The only loser on the Sensex was Hindustan Unilever, down 0.2%.
From the broader markets, the midcap and the smallcap indices were up over 1% each.
Market breadth was positive, 1383 stocks advanced for 371 stocks which declined.