Markets continue to trade firm

Power, bank stocks lead gains

Markets continued to trade firm in afternoon trades with buying seen in capital goods, power and banking shares. The Sensex, after touching a high of 17,380 is now trading up 353 points at 17,343. Nifty is up 105 points at 5,253.

In Asia, shares jumped and the euro surged more than 1% after European leaders agreed that euro zone banks could be recapitalised without adding to government debt, soothing fears over growing credit strains in Italy and Spain.

Meanwhile, Morgan Stanley has upgraded Indian stocks to "equalweight" after being "underweight" since the first quarter of 2011, saying India is now trading at a price to book multiple of 2.1x, close to the trough valuations of 2.0x in the 2002 and 2008 cycles.

BSE capital goods index has gained 3% to 9,964. Power, bankex and consumer durables indices have added over 2% each.

ITC and ICICI Bank have contributed 90 points to the Sensex's upmove. Tata Power is the top gainer and has added 4% to Rs 103 on reports that the private utility company aims to raise its generation capacity to 26 gigawatt(GW) by 2020, from the current 5.2 GW. Jindal Steel, ICICI Bank, Maruti Suzuki and Hindalco have added 3.5% each. Among other gainers are SBI, Reliance and TCS.

Among other stocks, Cain India tanked almost 6% to Rs 309 in otherwise firm market in the early trades on back of huge block deals on the BSE and NSE.

L&T has advanced 4% to Rs 1,391 on news that L&T Construction has secured orders valued Rs 1,002 Cr.

BSE market breadth is fairly positive. Out of 2,690 shares traded, 1,697 have advanced while 855 have declined.