Markets surge on govt's reforms agenda

Index hevyweights lead the rally

Key benchmark indices continue to trade with over 1% gains on the back of government's reforms agenda and a strong PMI for the services sector. At 12:55 pm, the Sensex had advanced 214 points at 19,084 and the Nifty gained 67 points at 5,798.

In the broader markets, the midcap index was in line with the Sensex, up 1% each while the smallcap index underperformed with 0.7% gains.

India's services sector expanded at its fastest pace in seven months as a spurt in new business encouraged firms to hire more staff, a survey showed on Thursday, suggesting the worst of the economic slump may be over. The HSBC purchasing manager's index (PMI) for the services sector, which gauges the activity of hundreds of Indian companies, rose to 55.8 in September from August's 55.0.

The rupee rose to 51.96/97 from its close of 52.155/165 on Wednesday, after earlier rising to a 5-1/2 month high of 51.86. Dealers cite inflows from Indian Railway Finance Corp's recent $300 million bond sale, while also citing inflows from a large engineering company. Exporter selling has also kicked in from 52.04 levels, they add.

Asian shares edged higher in choppy trade on Thursday, with investors worrying about slow global growth and awaiting fresh U.S. economic data and a European Central Bank policy meeting later in the day. Nikkei up nearly 1% was the top gainer along with KLSE Composite, Jakarta Composite up 0.4-0.6%.

Back home, among the sectoral indices, Realty index was the top gainer, up 4% followed by Bankex, Power, Capital Goods, Oil & Gas and Consumer Durables adding 1-2%. On the other hand, Health Care and IT indices dipped 0.2% each.

The movers among the Sensex stocks were BHEL, ICICI Bank, HDFC Bank,Bharti Airtel, Tata Steel, Dr Reddys Lab, Gail India and HDFC up 2-5%.

Among the losers were auto scrips like Hero MotoCorp, Mahindra & Mahindra, Bajaj Auto down 0.3-1%. The other notable losers included Cipla, Coal India and Infosys losing between 0.2-1%

Among other stocks, Shares of state-owned oil marketing companies such as BPCL, HPCL and IOC, have rallied 4-5% each on hike in non-subsidized cooking gas prices by 17% to Rs 883 per cylinder effective from October 1.

Kingfisher Airlines' stock continued to fall the fourth consecutive day, and was down 4.79% during intra-day with even as news reports came in that the airline has agreed to pay March salaries in the next 10 days.

The market breadth was very positive on the BSE. 1708 stocks advanced while 975 stocks declined.