A pull-back rally, led by metal companies such as Hindalco Industries and Tata Steel, and short-covering in the derivatives market led to over 2 per cent rise in the benchmark indices of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on Wednesday.

Fresh buying from foreign institutional investors, positive response to NTPC’s follow-on public offer (FPO) and opening gains in European markets also boosted sentiments.

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The indices opened on a higher note in line with positive Asian markets and gained momentum as the day progressed. The BSE’s benchmark, Sensex, rose 332 points, or 2.06 per cent, to 16,496. The broader index S&P CNX Nifty of the NSE was up 101 points, or 2.1 per cent, at 4,931.

“We do not see much upside in markets. The Budget is likely to set the tone for withdrawal of the stimulus package. For the time being, the downside for the Nifty will be around 4,800. Till the FPO is on, the markets may hold on,” said Ambrish Baliga, vice-president of equities at Karvy Stock Broking.

The BSE Metal index was up 4 per cent while the BSE Realty index rose 2.8 per cent.

The biggest Sensex gainers were Sterlite Industries, up 5.97 per cent, Tata Steel (4.9 per cent), Larsen & Toubro (3.8 per cent), HDFC (3.76 per cent) and Hindalco Industries (3.27 per cent), Sun Pharmaceuticals, down 1 per cent, was the lone laggard in the 30-share index.

The market breadth was positive on the BSE, with 1,775 advances and 1,046 declines.

European markets opened firm and key benchmark indices in Asia closed 0.32-2.36 per cent higher.

NTPC FPO subscribed 70% on Day 1

The follow-on public offer of state-run power generation company NTPC was subscribed 70 per cent on the first day of bidding, NSE data showed. The issue received bids for over 250 million shares, as against 412.2 million shares on offer. Of the total bids so far, the largest number, of 208.8 million shares, were made at Rs 209. The share price of NTPC closed at Rs 209.80, up 1.8 per cent.

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