Markets opened higher tracking upbeat global cues and buying in banking and metal shares. The Nifty advanced 57 points, at 5,037 and Sensex gained 194 points, at 16,755.
Overnight, Wall Street indices rallied 3% on Monday, extending gains into the second week as Germany and France jointly decided to recapitalize debt ridden banks by the end of the month. The Dow Jones industrial average gained almost 3%, the S&P 500 Index gained 3.4% and the Nasdaq Composite Index added 3.5%.
In Asia, the Japan's benchmark Nikkei average opened up 2% on Tuesday morning, the Hang Seng index rallied over 3% and Shanghai Composite was up 1% with financials and exporter shares leading the gains.
Markets rallied 2% yesterday on back of short covering and fresh buying across the board. On the charts, the Nifty may see immediate hurdle at 5,050 levels. "Positive bias is seen above 4,925 levels, acceleration of uptrend will be witnessed to the levels of 5,200 on the close of 5050," said Shrikant Chouhan, Head of Technical Research from Kotak Securities. If the Nifty breaks 4,830, selling pressure may resume added Chouhan. Corporate earnings will be closely watched and they may provide further direction to the markets.
Telecom stocks were in the limelight this morning on account of the draft Telecom Policy announcements made yesterday that proposed infrastructure status for the sector, suggested rationalization of taxes and levies besides removal of roaming charges. Bharti Airtel rallied over 4%, Idea Cellular gained 3% and Reliance Communication was up 3%.
Among individual stocks - ONGC was down over 1% today after the company said net profit will drop by over 47% to be Rs 10,000 crore. Provogue India was up 1% after one of its promoters pledged 24 lakh shares of the company. UB Holdings Ltd (UBHL), which holds the three main group companies - United Breweries, United Spirits and Kingfisher Airlines was up 3% as the company is set to raise its borrowing powers by another Rs 1,000 crore, the stock will also be in the lime light today.
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On Monday, foreign institutional investors were net buyers of Rs 211 crore in cash, while domestic institutional investors were net sellers of Rs 37 crore.
Among the sectoral pack, banking shares were leading the gains, up almost 2%. State Bank of India advanced almost 2% after news that country’s largest bank will raise Rs 5000 crore via rights issue of shares in December and government is likely to subscribe its share fully in cash. Axis Bank and ICICI Bank were also up around 2% each.
BSE Realty index was up almost 2%; Sobha Developers was up 4%, Godrej Properties added over 3% and Prestige Estates advanced over 3%.
Prominent gainers on the Sensex were Reliance Industries, up 1%, HDFC added 1.6% and Larsen & Tourbo surged almost 2%. Major losers were Infosys, down almost 2% ahead of first quarter results, ONGC declined 1.7% and Maruti was down 0.8%.
Market breadth was positive, 1379 stocks advanced for 434 stocks which declined.