Markets gain momentum; Nifty reclaims 8,500

Markets have gained momentum with Nifty reclaiming the 8,500 mark as investors sought to buy bluechips at attractive valuation with healthcare and IT shares leading the rally on the back of weak rupee.

At 11:35 AM, the 30-share Sensex was up 126 points at 27,957 and the 50-share Nifty was up 35 points at 8,501.

The top 5 gainers on the Sensex are Sun Pharma, Cipla, Lupin, Wipro and RIL up between 1.5-4%.

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(updated at 11:35 AM)

Markets recouped early losses and were trading flat as gains in export-led sectors suchs as information technology and pharma helped offset most of the losses in FMCG and select financials. However, the sharp sell-off in Chinese shares continued to weigh on market sentiment.

At 10:35AM, the 30-share Sensex was down 2 points at 27,830 and the 50-share Nifty was down 3 points at 8,463.

In the broader market the BSE Mid-cap and Small-cap indices were up 0.2-0.4% each. Market breadth was positive with 845 gainers and 603 losers in early trade.

"For the Sensex resistance is at 27897 above 27994 and 28038. Support is at 27707 below 27638. In case of NIFTY resistance is at 8485 above 8515. Support is at 8440, 8432, 8428 below 8400," Geojit BNP Paribas said in a note.

Meanwhile, the rupee continued to trade weak against the US dollar. The rupee was trading lower by 5 paise at 65.36 compared to its previous close on Monday.

Foreign institutional investors were net sellers in equities to the tune of Rs 255 crore on Tuesday, as per provisional stock exchange data.

BSE Healthcare, Consumer Durables, Oil and Gas indices were the top gainers while Metal and Bankex indices were the top losers.

Export-led stocks in the IT and pharma space gained on expectations that the weakening rupee would help boost revenues during the second quarter. Sun Pharma was the top gainer up 2.6% followed by Lupin, Cipla and Dr Reddy's Labs.

Among IT exporters, Infosys, TCS and Wipro were up 0.1-0.9% each.

Metal shares were down tracking amid concerns of weak demand from China. Tata Steel and Hindalco were down 0.3-1% each.

FMCG shares witnessed profit taking amid concerns that weak monsoon would hurt rural volume growth. ITC eased 0.6% while HUL was trading flat.

Other Sensex losers include, HDFC, HDFC Bank and Bharti Airtel among others.

Among other shares, Glenmark Pharmaceuticals hit a new high of Rs 1,187 on the Bombay Stock Exchange (BSE) in early morning trades after the company said it has received final approval from the US drug regulator for drospirenone and ethinyl estradiol tablets.

Shares of Majesco are locked at the upper circuit, up 5% at Rs 332, on the National Stock Exchange (NSE) on its first day of listing pursuant to the demerger of the insurance products and services business of Mastek into the company.