The markets started in the green in line with the global markets, with the Sensex up 109 points at 17,161 and the Nifty up 31 points at 5,168. However, the BSE benchmark index pared some of its initial gains and is currently at 17,109 up 50 points. The Nifty is up 14 points at 5,152.
The broader markets have started on a stronger note with both the smallcap and the midcap indices up 0.8% each outperforming the Sensex which is up 0.4%
In the US markets overnight, stocks shot up 4% as bargain-hungry investors overcame the recent wave of fear that drove selling over the last two weeks. Yesterday's rally was the second bounce in a yo-yo week. After a sell-off that pushed the S&P 500 down as much as 17% since July 22, the market was showing some signs of regaining its footing.
The Dow Jones industrial average surged 4%, to 11,143. The Standard & Poor's 500 Index shot up 4.6%, to 1,173. The Nasdaq Composite Index jumped 4.7%, at 2,493.
As a result, the Asian stocks edged higher. Also, investors hunted for value after an intense week of volatility, though the festering European financial crisis may mean that havens like gold and the Swiss franc may still draw buyers.
Hang Seng, Jakarta Composite, Straits Times and Seoul Composite up 1% each are the top gainers. Shanghai Composite added 0.6% and Japan's Nikkei share average rose 0.2%.
All the sectoral indices started in the green except the Oil & Gas index down 0.3%. The ones leading the opening gains are Realty, Metal and Health Care indices up 0.8-1%. The movers in the realty space are Sunteck Realty up 8% followed by Sobha Developers, D B Realty, HDIL, Unitech and DLF adding 1% each.
The draggers in the Oil & Gas space are HPCL, Oil India, IOC down 0.4-0.6%.
The losers among the Sensex stocks in the opening trades is Tata Motors down 1.5% after CLSA downgraded the company to under-perform from outperform, with the target price reduced to Rs 790 from Rs 1,150. The other notable losers are Hindalco, Reliance Industries and Wipro down 0.2-0.4%
Among the Sensex gainers are Mahindra & Mahindra, Sterlite, Jindal Steel, Tata Power, Cipla and ICICI Bank up 1% each.
The market breadth is positive. 979 stocks advanced while 270 declined in opening trades.
Among individual stocks, L&T Finance Holdings, a unit of engineering giant Larsen & Toubro (L&T), has debuted at Rs 49.50, a 5% discount against its issue price of Rs 52 per share on the Bombay Stock Exchange. The stock that hit high of Rs 52 thus far has seen around one million shares changing hands on the counter in opening deals.