Markets made a gap-up opening and were trading firm in the morning session in line with gains across Asia. Investors flocked to pick up blue chips which were battered badly in the past few weeks after political imbroglio ended over the weekend.
The Nifty was trading firm at 4,857, up 109 points and the Sensex was at 16,221, up 380 points.
Over the weekend, the political gridlock came to an end when the government gave into Anna Hazare’s demand on the anti-corruption bill. On Friday, the United States Federal Reserve refrained from introducing new measures to bolster the economy, but said that they would take actions to stimulate employment which also improved investor sentiment.
Japan’s Nikkei Stock Average was up 1.3%, Hong Kong's Hang Seng added 1.5% and South Korea’s Kospi Composite jumped 2.8% following firm closing on Wall Street on Friday. However, China's Shanghai Composite bucked the trend and was down 1.3% on reports that People’s Bank of China has increased the amount that banks must set aside as reserves.
Going forward, analysts said markets will take cues from the first quarter GDP data expected on Tuesday as it will closely determine the likely action that the Reserve Bank of India will take to fight Inflation. Inflation has remained stubbornly high around 9.8% for the week ending August 18. Economists fear that growth in the first quarter could slip below 8%.
All the sectoral indices were trading firm. BSE IT index was the top gainer up 3.1%, followed by bankex and metal indices, up over 2% each.
Top gainers from the IT pack were TCS, Infosys, and Wipro, up almost 3% each. From the metal pack Jindal Steel zoomed 7%, JSW Steel and NMDC added 3% and 4% each.
ICICI Bank was up 3%, Axis Bank and HDFC Bank advanced 2.4% each.
All the components on the Sensex were trading in the green. Reliance Industries (up 3.2%), Infosys (up 3.2%) and ICICI Bank (up 3%) contributed 120 points on the Sensex in morning trades.
From the broader markets, the midcap and the smallcap indices were up over 1% each.
Market breadth was positive; 1362 stocks advanced for 335 declining stocks.