Markets trading at day highs

BSE Auto anf FMCG indices lead, up 3%

The stock markets were trading at the day's high in late-noon trades on buying interest across the board. The BSE Sensex was at 16,296, up 275 points and the Nifty at 4,951, up 88 points.

Earlier in the day, the benchmark indices had witnessed a gap-up opening owing to positive global cues.

In Asia, Japan's Nikkei average rose on Wednesday, recovering further from Monday's six-month closing low as investors looked to policy makers to counter the euro zone crisis, and Australian and US data offered some positive news. The index is up nearly 2% at 8,534. The Hang Seng index, too, has gained 1% while the Shanghai Composite index is down marginally.

On the sectoral front, buying interest is visible across the board led by Auto and FMCG indices, up 3% each.

Shares of FMCG companies rallied on hopes of good rainfall this year will help increase farm output, which takes up income, improving sales. The prominent gainers from the space are ITC, Dabur India and Hindustan Unilever, up 3-4% each.

Interest rate sensitive stocks gained on hopes that RBI will cut interest rates at mid-quarter monetary policy review to support the slowing economy. The top gainers from the banking counter were Bank of Baroda, Yes Bank, HDFC Bank and IDBI Bank, up 2-3% each.

Among the Sensex 30 stocks, Tata Motors, Hero MotoCorp, Jindal Steel and Sterlite Industries, up 3-5% each, are the notable gainers. Hero MotoCorp has surged 5%, extending its past two days 2.4% gain on reports that the company has proposed to invest Rs 2,575 crore to set up two new plants in Rajasthan and Gujarat and an integrated research and development (R&D) centre. The expansion plans would boost its annual production capacity to nine million from the current seven million, according to the report.

The only loser from the pack is Bharti Airtel, which was trading flat with negative bias.

The broader markets are trading in line with the benchmark indices, with the BSE mid-cap and small-cap indices having advanced 1-2% each.

The overall market breadth is positive as 1,642 stocks have advanced against 785 declining ones, on the BSE.