Markets extend gains led by buying in rate-sensitives

BSE-auto, real-estate led gains among sectors

Indian shares extended opening gains on Wednesday led by buying in rate-sensitive sectors such as automobiles, real-estate and banking stocks and amid building confidence that the US will reach a budget deal with Congress to avoid fiscal cliff.

At 10:10AM, the Bombay Stock Exchange's Sensex index rose 120 points and traded at 19,491.91 while the National Stock Exchange's Nifty-50 index gained 34 points at  5,931.30.

Asian markets are trading positive too as optimism grew that a deal would be made to avert the "fiscal cliff" amid hopes of economic stimulus from the Bank of Japan this week.

Hong Kong's Hang Seng was up 0.73% to 22,660 while Japan's Nikkei rose 1.3% to 10,050. China's Shanghai Composite was marginally down by 0.1% to 2,160.

The MSCI Asia Pacific index outside Japan gained 0.32% to 899.09.

Back home, all sectoral indices were up with automobiles, real-estate, banks, metals, IT leading gains on BSE.

Among key Sensex stocks, BHEL rose 1%, Sterlite Industries and Tata Steel gained over 1% each in metal space while ONGC gained 2%. The laggards included HDFC falling 1%, Hindustan Unilever declined 0.3% while ICICI Bank was tad down by 0.1%.

Bank stocks rose after government cleared the banking bill paving way for foreign investments in the sector and establishment of new private banks. Moreover, hopes of policy easing by the Reserve Bank of India in January monetary policy after positive undertone in Tuesday's review aided buying in other rate-sensitives too.

Maruti Suzuki, country's biggest car maker gained 2.5% while DLF, the biggest developer in India, rose 1.4% on BSE.

Among the banking stocks, Edelweiss Financial Services, Religare Enterprises, Bajaj Finserv and Mahindra and Mahindra Financials from NBFC and State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore from banking sector are trading higher by 3-8% on the Bombay Stock Exchange.

The other notable moers include, Eros International Media which is trading higher by 2.5% at Rs 215 after the promoter of film distribution company propose to sell 2.8% of its holding in the company through Offer for Sale (OFS) to meet the minimum public shareholding requirement.

The BSE mid-cap and small-cap gained 0.3-0.7%.

The overall breadth is strong as 1,330 stocks gained while 601 stocks declined on the BSE.