Markets extended morning gains led by buying in frontline financial and IT shares, shrugging off subdued trade across Asia. The Nifty advanced 73 points at 5,102 and the Sensex surged 253 points, at 16,972.
Infosys, TCS, HDFC Bank and HDFC have contributed 120 points on the Sensex.
--------------Updated at 09:30 am
Overnight US markets ended lower following renewed concerns in Europe after meeting between leaders of France and Germany failed to quell fears of sovereign debt crisis. Investor sentiment was further dented after Germany reports negative GDP growth of 0.1%. While Germany's Angela Merkel and France's Nicolas Sarkozy unveiled plans for a closer Eurozone integration, they refrained from selling common European bonds and also hinted for a financial transaction tax. In the US, the Nasdaq Composite and the S&P 500 lost almost 1% each and the Dow Jones Industrial Average was off 0.7%.
Asian markets were trading flat in the morning session, the Nikkei Stock Average was at 9,017, Shanghai Composite was also unchanged at 2,729 and the Hong Kong's Hang Seng was up 0.8%, at 20,370.
On Tuesday, the Indian markets ended at 14 month low after July Inflation remained stubbornly high at around 9.2% stoking fears that the Reserve Bank of India would go ahead with rate tightening during the September policy. Analysts said that margins of India Inc may continue to remain under pressure due to high interest rates.
Among individual stocks DLF slipped 3% to Rs 183 after Competition Commission of India imposed a penalty of Rs 630 crore on the company for unfair trade practices and abuse of market dominance. Bharti Airtel was down 1% after reports that the Directorate of Enforcement was investigating the company for suspected violence of foreign Exchange rules.
Financial shares were leading the gains in the morning session, HDFC Bank, HDFC and SBI (up over 1% each) contributed almost 45 points to the Sensex.
Among sectoral indices - BSE Oil & Gas index was the top gainer, up 0.9%. ONGC was up 2%, Essar Oil added 0.9% and Gail India gained 0.8%.
BSE Realty index was a laggard in trade on concerns that further tightening may dampen demand for homes. The BSE Realty index was down 0.8%. Besides DLF, Anant Raj Industries dipped 8%, DB Realty declined 1% and Godrej Properties was down 1%.
Top losers on the Sensex were Tata Motors, down 2.7%, Mahindra & Mahindra slipped 1.5% and Bharti Airtel was off 0.9%. Prominent gainers were ONGC, up 2.1%, JP Associates added 1.8% and HDFC Bank advanced 1.7%.
Market breadth was positive, 447 stocks advanced for 465 stocks which declined.
