Markets have extended their gains ahead of August WPI on broadbased buying demand with the Sensex and the Nifty surging by over 2% each.
Interest rate sensitive counters are witnessing strong buying demand on hopes that cut in key policy rates by the central bank.
By 11:25, the 30-share Sensex was up 378 points at 18,399 and the 50-share Nifty gained 117 points at 5,552. The Sensex and the Nifty reached an intra-day high of 18,456 mark and 5,564 levels, respectively so far.
On the global front, Asian shares rose to a four-month high on Friday while the dollar remained weak against other major currencies after the U.S. Federal Reserve announced an aggressive new stimulus to drive job creation in the U.S. economy. Nikkei, Strait Times, Hang Seng, Shanghai, Taiwan and Kospi have surged between 1-3%.
Back home, the rupee gained a hefty 71 paise to trade at two-month high of 54.72 against the dollar in early trade today at the Interbank Foreign Exchange as the American currency weakened against euro overseas.
On the sectoral, BSE Realty and Bankex indices have surged by almost 4% followed by counters like Metal, Auto, Capital Goods, Oil & Gas, PSU, Power, IT and Consumer Durable, all gaining between 1-3%.
Real Estate segment have gained ground on anticipations that the RBI will cut interest rates to support the slowing economy. DLF, Anant Raj Inds, Indiabulls Real, HDIL and Unitech have surged between 2-8%.
Banking shares are in limelight in morning trades with most of the frontline stocks rallied up to 10% on hopes of interest rates cut.
The government's move to raise diesel prices provides room for Reserve Bank of India (RBI) to ease monetary policy to give thrust on growth. The RBI scheduled to meet on Monday to review the monetary policy.
Among the individual stocks, ICICI Bank has hit 52-week high and rallied up to 10% at Rs 1,055 on the NSE. State Bank of India (SBI) has surged 5% to Rs 1,959, followed by Yes Bank and Union Bank of India are up 4% each at Rs 355 and Rs 166 respectively.
Shares of metal companies have surged more than 3% each after the U.S. Federal Reserve announced another aggressive stimulus plan to buy mortgage-related debt and other assets until the outlook for jobs improves.
Hindalco Industries, the largest gainer among metal pack, surged 6% to Rs 116 on the Bombay Stock Exchange (BSE).
Jindal Steel and Power has rallied 5%, Sterlite Industries and Tata Steel up 4% each, while Sesa Goa, Hindustan Zinc, Steel Authority of India and JSW Steel are trading higher in the range of 2-3%.
From the Auto space, Tata Motors, Maruti Suzuki, M&M, Bajaj Auto and Hero Moto have gained between 2-4%.
Other notable gainers include L&T, Tata Power, GAIL, RIL, HDFC and Infosys.
Among other shares, Essar Oil is trading higher by 6% at Rs 51.20 after the Supreme Court directed the company to pay the balance sale tax dues in installments spread over two years.
Shares of airline companies have seen huge trading activities on the bourses ahead of Cabinet Committee on Economic Affairs (CCEA) meeting today to consider the proposal of foreign direct investment (FDI) into the sector.
Jet Airways, SpiceJet and Kingfisher Airlines are trading higher by more than 4% each on back of heavy volumes on the Bombay Stock Exchange.
The broader markets are under performing the benchmark indices, both gaining by over 1%.
The overall market breadth in BSE remains positive with 1,542 shares advancing and 937 shares declining.
