Markets ended on a firm note following recovery in the European markets and buying in index heavyweights - Reliance Industries and TCS, ahead of second quarter results. The Sensex closed at 17,083, up 199 points, and the Nifty ended at 5,132, up 54 points.
Earlier in the day, the Sensex opened on a subdued note and touched a low of 16,828 in the morning session, tracking weak Asian peers after S&P downgraded Spain. The index changed tracks around noon and reclaimed 17,000 and touched a high of 17,112 during the last leg of the trade, following gains in Europe. For the week, the Nifty and Sensex advanced 5% each.
Market analysts expect Nifty to scale to 5,200 levels in the near term. A K Prabhakar, Senior Vice President from Anand Rathi said, “The Nifty is holding on to 5,000 levels, therefore 5,200-5,300 level is a possibility.” Until there no bad news from Europe, stocks specific gains from the second quarter results will support the markets, added Prabhakar.
In Asia, the Japan's benchmark Nikkei average closed down 0.6% , Hang Seng fell 1.4% and Shanghai Composite declined 0.3% after the Standard & Poor's downgraded the long-term credit rating of Spain by one notch.
Fresh downgrade brought back the fear of sovereign debt contagion in Europe. The European markets opened in the red, but recovered soon after. The FTSE, CAC and DAX were up almost 1% each.
Back in India, inflation for the month of September stood at 9.72% y-o-y, in line with street expectations according to government data, but it remained near double digit levels, raising fears of another 25 rate hike.
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Among individual stocks Reliance Industries jumped 2%, at Rs 866 ahead of second quarter results on Saturday. The advance tax payments surged 38% to Rs 1,800 crore in the July to September against the same period last time, hinting upbeat results. Even TCS zoomed 4%, at Rs 1,134 and there are expectations that it may post good results after Infosys beat street estimates.
Maruti Suzuki dipped 3% and touched a two year low of 1024 and closed at Rs 1028 as strike at various plants continued.
Among the Sensex stocks - Infosys, Bharti Airtel and ITC ended up between 1-4% each. However, Coal India, DLF and Tata Steel, closed down 3% respective.
Realty shares led the losses, down 1%. Major losers were Prestige Estates, down 5%, followed by DLF and Oberoi Realty, down 3% each.
Metal shares were the next worst hit on concerns of demand slowdown from China. “If inflation continues to remain high China, it would warrant another rate hike, which could result in another fall in commodities and commodity based stocks in India," said Amit Chheda, Head of Equity from Inventure Growth and Securites. From the metal pack - Sesa Goa slipped 4%, Coal India and Tata Steel lost 3% each.
From the broader markets, the midcap and the smallcap indices were up 0.6% and 0.3% each.
Market breadth was positive as 1,425 stocks advanced, for 1,330 declining shares on the BSE.