Markets were trading higher in afternoon deals after inflation for September was reported at 9.7%, in line with expectation; recovery across European bourses also helped. The Sensex was at 17,033, up 140 points, and the Nifty was hovering around 5,117, up 38 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 in the around noon and was trading firm in the late afternoon following recovery in European markets.
In Asia, 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.
Among the Sensex stocks - Infosys, TCS and ICICI Bank were up 1-3% each. However, Coal India, DLF and Tata Steel, down 3% were capping the gains.
Reliance Industries jumped 2%, at Rs 864 ahead of second quarter results tomorrow. 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.
Maruti Suzuki dipped 3% and touched a two year low of Rs 1024 as strikes at various plants continued.
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Realty shares continued to lead the losses. Major losers were Prestige Estates, down 4%, followed by DLF and HDIL, down 2-3% each.
Market breadth turned positive, 1,349 stocks advanced, for 1,296 declining shares on the BSE.