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Markets extended gains in the first hour of trade and were trading near their day's highs led by bank shares along with auto major Tata Motors.
At 10:40AM, the 30-share Sensex was up 63 points at 21,268 and the 50-share Nifty was up 18 points at 6,321 after hitting an intra-day high of 6,329.
The rupee firmed up against the US dollar in early trades and was up at Rs 61.49 compared with the previous close of 61.62.
Asian markets firm up on Tuesday as Japanese stocks rebounded and Chinese money rates eased, while the US dollar got a fillip from a report the Federal Reserve would again trim its bond buying next week. The dollar broke the early lethargy with a hop to 104.48 yen when the Wall Street Journal reported the Fed is on track to trim its bond-buying program for the second time in six weeks, paring back by $10 billion to $65 billion a month. The Nikkei was up 1.4% while Shanghai Composite and Hang Seng were up 0.6% each and Straits Times rose 0.4%.
The BSE Auto index was the top gainer among the sectoral indices followed by Bankex and Capital Goods.
In the banking pack ICICI Bank, Axis Bank, SBI and HDFC Bank were up 1-2% each on hopes that the central bank would maintain status quo on key rates at its policy meet next week.
Tata Motors was up 2.5% after the company unveiled an indigenously developed petrol engine. The 1.2-litre turbo-charged engine showcased today, is the first in this class developed by it in about 15 years. Ity previously did so for the Indica car in 1998.
Other Sensex gainers include, L&T, Tata Steel and Maruti Suzuki among others.
Meanwhile, IT shares which had gained over the past few sesssion witnessed profit taking. Infosys and TCS were down 0.5-1% each.
Index heavyweight Reliance Industries was down 0.4% at Rs 866 on concerns that net profit would have been lower-than-estimated without sharp growth in other income. The company’s net profit stayed flat both sequentially and annually at Rs 5,511 crore during the October-December quarter of FY14 compared with Rs 5,502 crore year ago quarter. RIL’s other income stood at Rs 6,900 crore, up 32 per cent against Rs 5,755 crore in the corresponding previous quarter.
Coal India was down 1.4%. The company has been witnessing profit taking after the stock was quoted ex-dividend. The company has paid a special interim dividend of Rs 29 per share.
Among other shares, Sasken Communication Technologies has surged 6% to Rs 208 after its board declared a special dividend of Rs 22.50 per share (225%), in celebration of its 25th year since incorporation.
In the broader market, the BSE Mid-cap and Small-cap index were up 0.5-0.7% each.
Market breadth was strong with 1,106 gainers and 611 losers on the BSE.
