Indian shares extended gains in late morning trades amid hopes that the Congress-led UPA government may muster a majority to pass key reforms in the winter session of Parliament starting November 22.
Buying was witnessed in pharmaceutical companies such as Cipla, Sun Pharma and software majors Inofsys and TCS while private banks such as HDFC Bank and ICICI Bank also supported on the upside.
At 11:25AM, the Bombay Stock Exchange's Sensex index was up 104 points to 18,433.39 while the National Stock Exchange's Nifty index gained 27 points to 5,598.10 levels.
Global risk appetite was slightly weak as investors squared positions before the Thanksgiving holiday on Thursday and a long weekend.
Meanwhile, US markets slipped back into negative territory on Tuesday after Federal Reserve Chairman Ben Bernanke signalled at significant downside risk to the world's biggest economy if government fails to strike a deal to prevent a fiscal shortfall of some $600 billion.
Asian markets traded mixed. Hang Seng was up 60 points at 21,288, Nikkei advanced 40 points to 9,183, Seoul Composite fell 9points to 1,881 and the Taiwan Weighted was down 69 points at 7,076.
Back home, markets traded firm on hopes the government may get support from Tamil Nadu’s DMK and the Uttar Pradesh-based parties, SP and BSP, will to push forward earlier nnounced reforms.
“The impact of political risks on the market over the next month or so is a bit exaggerated," said Suresh Mahadeven, managing director-head of India equities at investment bank UBS. “It looks like the government is on a stable footing as of now."
On the sectoral front, real-estate, banks, fast moving consumer goods on BSE rose between 1-1.3% each while auto and power companies were among the laggards, falling between 0.03-0.2% in the late morning trades.
Among the losers, BHEL fell 1% while Maruti Suzuki and Hero MotoCorp dropped 1% each.
Aided by a weak rupee, sales from niche opportunities, product launches and strong base business Indian pharmaceutical majors reported a 30% revenue growth for the quarter ended September 2012. Cipla, Sun Pharmaceuticals rose over 1% each.
Major software exporters firmed up on the back of a weakening rupee. Infosys and TCS were up nearly 0.9% each.
ICICI Bank and HUL gained 2% and 1% respectively on the BSE.
Among other notable movers, Mphasis has dipped 3% to Rs 388 on reports that Hewlett-Packard Co (HP) said it took an $8.8 billion charge related to its acquisition of software firm Autonomy, citing "serious accounting improprieties," as it swung to a fourth-quarter loss
DB Realty has rallied 6% to Rs 121 on back of heavy volumes on reports that the Bharti Group is planning to buy a majority stake in the company’s hospitality arm DB Hospitality for Rs 350 crore.
SpiceJet is trading higher by over 3% at Rs 35.95 on reports of stake sale of the company after the resignation of Kalanithi Maran and his wife Kavery Kalanithi from the board of directors of Kal Airways.
The BSE mid-cap and small-cap indices also rose nearly 0.3% each.
The overall breadth is positive as 1,276 stocks have advanced while 984 stocks declined.