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Benchmark indices have rebounded from day’s low led by buying in financials, capital goods and metal shares.
At 12:10 pm, the Sensex was up by 160 points at 24,282 mark and the Nifty gained 40 points at 7,243 mark.
The broader markets are outperforming the benchmark indices- The BSE mid-cap index gained 2.18% or 7,935 and the small-cap index was up 3.26% or 257 points at 8,143.
Adds Kunal Bothra, technical analyst, LKP Securities,” Short term trend is bullish and in sync with the longer term view. It’s been a long time, since such a combination of time frames are both in same direction with such intensity. We believe that dips should be bought into in the indices.”
Meanwhile, Nomura and Citigroup have raised their targets for Sensex after the Bharatiya Janata Party led by Narendra Modi thundered to victory in general election.
Nomura raises its 2014 target for the Sensex to 27,200 from 24,700, while Citigroup increases its target to 26,300. Goldman Sachs also raises its 12-month target for the Nifty to 8,300 from 7,600, implying a 15.2 percent upside from current levels.
On the global front, Chinese shares led Asia markets down on Monday, as concerns about slower growth in the world's second-biggest economy checked risk appetite and took a large slice off Australian equities.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked down 0.3%, led by Australian shares falling 1.0%.
Japan's Nikkei average was flat, reflecting sluggishness in much of Asia though mainland Chinese shares fell to two-month lows on news that Beijing is tightening its grip on interbank lending to defuse risks in shadow banks.
Back home, the rupee rose to its strongest in 11 months against the dollar on expectations of continued robust foreign buying in domestic shares and debt after the Bharatiya Janata Party swept the country's elections.
Foreign institutional investors (FIIs) bought shares worth a net Rs 3634.82 crore on Friday, as per provisional data from the stock exchanges.
On the sectoral front, BSE Power, Capital Goods and Metal indices have surged by 5% each followed by counters like Banks, Realty, Oil & Gas and Auto, all gaining between 3-4%. However, BSE IT index has slumped by over 5% followed by counters like Healthcare and FMCG, both slipping between 3-4%.
The main gainers on the Sensex are Coal India, NTPC, Tata Power, ONGC and Hindalco.
The BSE Metal index was the top gainer among the sectoral indices on the BSE, up around over 5%, on hopes that the new government's likely clearance for stalled infrastructure projects would lead to a pick-up in demand, going forward.
State-owned Coal India is the top gainer in the BSE Metal Index, up over 8%. According to a report by a foreign brokerage, reform of Coal India would be on the agenda of the new government. The company will announce its results for the year ended March 31, 2014 on May 29, 2014.
Sesa Sterlite is up 6% at Rs 228. Other gainers include SAIL, Hindalco, JSW Steel, Jindal Steel, Tata Steel and Hindustan Zinc, up 1.6-6% each.
The public sector undertakings or PSUs are on a roll, extending their past week's rally, after election results suggested the opposition Bharatiya Janata Party (BJP) and its allies won an absolute majority in the recently concluded Lok Sabha polls.
Coal India, RCF, Power Finance Corporation, Indian Bank, Rural Electrification Corporation, Shipping Corporation of India, Hindustan Copper, BEML, HMT and Dena Bank have rallied 6-11% each, while HPCL, Engineers India, Union Bank of India, BPCL and STC have gained 5% each on the Bombay Stock Exchange (BSE).
Shares of information technology (IT) are continued to reel under pressure trading lower by up to 5% on the National Stock Exchange (NSE) after the rupee hits 11 month high against dollar today.
A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
HCL Technologies, Wipro, Tata Consultancy Services (TCS) and Infosys are down 4-5%, while Infotech Enterprises, NIIT Technologies, Mind Tree and Persistent Systems dipped 3% each on the NSE.
Shares of SpiceJet were down 1.3% at Rs 14.75 on the BSE after the low-cost airline's net loss widened to Rs 321 crore in the fourth quarter ended March from Rs 186 crore in the corresponding period last prior year on expensive jet fuel, a falling rupee and slow passenger growth.
The market breadth in BSE remains firm with 1,715 shares advancing and 703 shares declining.
