Markets extend gains; Sensex reclaims 29,000, Nifty above 8,950

BSE Smallcap mirrored the gains in the frontline indices, but BSE Midcap index was little changed.

Snapping two-session long losing spree, the benchmark indices continued to trade higher in the afternoon trade as a much better-than-expected December quarter GDP data lifted sentiment, while positive manufacturing data released today also boosted sentiment.

At 02:48 pm, the S&P BSE Sensex was trading at 29,009, up 266 points, while the broader Nifty was ruling at 8,954, up 75 points. 

In the broader market, the BSE Smallcap and BSE Midcap index gained 0.4% and 0.6%, respectively. 

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,602 shares rose and 959 shares fell. A total of 162 shares were unchanged.

Annual gross domestic product (GDP) grew 7% in the December quarter, slower than 7.4% in the previous quarter but much faster than the 6.4% expansion forecast in a Reuters poll.

The data released late on Tuesday boosted markets, while economists were puzzled, as many had expected that the government's shock crackdown on cash would have a much bigger negative impact on growth.

The market sentiment was also underpinned by a private survey on Wednesday that showed Indian factory activity expanded for a second straight month in February.

The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of manufacturing activity -- increased to 50.7 in February, up from 50.4 in January, as output and orderbooks rose at accelerated rates.

BSE Realty index (up 3%) was the top sectoral gainer, led by gains in Sobha (up 18%), Oberoi Realty (up 10%) and Unitech (up 5%). 

Pharma stocks surged. BSE Healthcare index was ruling over 1% higher thanks to gains in Neuland Laboratories (up 20%), Lyka Labs (up 6%) and Dr Reddy's (up 3%)

Among individual stocks, Tata Tele gained around 15% after Tata Sons and NTT Docomo proposed a resolution to the Delhi High Court on settling a dispute over the $1.17 billion due to the Japanese telco for exiting their joint venture, ending two years of public acrimony. 

Shares of Majesco surged 12% to Rs 385 after the IT consulting & software firm said that its insurance arm and a subsidiary launched two new solutions.

Among decliners, shares of manganese ore miner Moil fell to a two-month low, after the company cut prices for different grades of manganese ore for the fourth quarter, its second consecutive cut after a series of price hikes.