Markets near days high

Banking shares up ahead of RBI policy

Markets extended gains in afternoon trades and touched the highs of the day with buying interest seen in banking and realty shares. The Sensex was up 247 points at 17,085. Nifty is up 81 points at 5,180.

Meanwhile Asian stocks rose after European leaders signaled during the weekend that they are prepared to take stronger action to curb ongoing euro-zone debt crisis. Hang Seng is up 1.3%, followed by Nikkei, Kospi and Straits markets. Shanghai Composite however, is down 1% at 2,109.

BSE bankex has gained 2.2% to 11,891. Capital goods and realty indices are up 2% each, followed by power and healthcare.

Banking shares are leading the gains ahead of RBI's policy review on Tuesday. Experts feel that the Reserve Bank is unlikely to cut its key policy rate which is the repo rate at first quarter review of the Monetary Policy. ICICI Bank is the top mover among Sensex stocks - up 4% at Rs 967. SBI has gained 2.6% at Rs 1,993.

"The sectors we would expect to do well among the rate sensitives are some of the leading private banks, engineering and capital goods and autos," said Rishi Nathany, CEO, Dalmia Securities Pvt. Ltd.

Tata Motors has added 2.8%, followed by Larsen & Toubro, Sun Pharma, Cipla and BHEL. IT stock Infosys has added 2% to Rs 2,189. However, Wipro has slipped 1.5% to Rs 329. TCS is flat at Rs 1,226.

Power Grid Corporation of India gained 3% at Rs 117 after company said that it has signed share holders agreement to set up two joint venture companies in India and Nepal.

NTPC is up 2% at Rs 156 on reports that production at three of the seven power generating units of the company in Bhagalpur district was stopped following inadequate supply of coal to the plant.

However, Maruti Suzuki is flat at Rs 1,110 as the labour unrest in Manesar continued. HUL is down 0.6% at Rs 462.

BSE market breadth continues to be positive. Out of 2,588 shares traded, 1,475 share have advanced while 1,002 shares have declined.