Benchmark indices up 1%; rate sensitives lead

Mahindra & Mahindra,Bajaj Auto, Wipro, HDFC Bank, Gail India and Maruti Suzuki among the top gainers

Markets continue to trade higher with both the Sensex and the Nifty up 1% each, after the Reserve Bank of India chief Duvvuri Subbarao hinted that "perhaps" there was a need to reduce the reserves that banks have to set aside via the cash reserve or the statutory liquidity ratios.

At 1245 hrs, the Sensex was 192 points at 19,140 and the Nifty edged higher by 58 points at 5,671.

In the broader markets, the midcap index advanced 1%, in line with the BSE benchmark index and the smallcap index gained 0.7% in noon deals.

Meanwhile, in Asia, Japanese shares rose sharply and the yen fell after a media report on Tuesday said Prime Minister Shinzo Abe is considering a cut in corporate tax to counter the pain of a planned sales tax increase, while gold eased but held near three-week highs.

Tokyo's Nikkei share average climbed 2.6% in light volume, rebounding after it fell to its lowest since end-June following Monday's slower-than-expected GDP data. Tuesday's gain took the index to just below its 13-week moving average.

Asian shares as measured by MSCI Asia-Pacific ex-Japan index rose 1.0% to a two-week high, extending Monday's gain on the back of last week's upbeat Chinese factory output data, while South Korean shares advanced 1.5%.

Tuesday's gains took the MSCI Asian gauge to near its 50% retracement of its slide from a 22-month high on May 9 to an 11-month trough on June 25.

Back home, among the sectoral indices, apart from Metal and Consumer Durables indices which were down 0.6% and 0.3% respectively, all the others were in the green.

Rate sensitives like Realty, Auto and Bankex advanced 1.6-3%. Power, Teck, IT, Health Care and Capital Goods indices were the other significant gainers, up 1-2%.

The only losers among the Sensex-30 were Hindalco down 3.7% followed by Coal India, ONGC, ITC and SBI down 0.3-2%.

Meanwhile, Mahindra & Mahindra up nearly 4% ahead of its July-quarter results later in the day was the top Senex gainer. NTPC, Bajaj Auto, Wipro, HDFC Bank, Gail India and Maruti Suzuki, up 2-3% were the other notable gainers.

The market breadth was very positive. 1,236 stocks advanced while 762 stocks declined on the BSE.