Market rally gains momentum

Markets close in the green after a strong session today; the Sensex closed up 287 points at 19,707, while Nifty ended higher by 82 points at 5,908.

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(Updated at 1430 hrs)

Although the markets snapped their 8-day winning streak on Friday, they started on a robust note today, as the bourses opened higher on the back of positive US jobs data and Asian stocks, currently at 3-year highs,  which buoyed investor sentiment worldwide. In the late noon trades, the markets continued with their strong movements, and the Sensex was quoting near the day's high of 19,704 up 284 points, while the Nifty was at 5,916 up 90 points.

Earlier in the day, the Sensex, although firmly in the green since opening, touched its intra-day low of 19,449, post which a recovery was seen. Range-bound trade dominated till the late morning session, but closer to noon, heavy buying on the IT, consumer durables and metal counters propelled the markets, and saw them extend their gains.

With the impending corporate earnings season, the markets were upbeat, with analysts expecting the Q4FY11 results to outperform the previous quarter, and healthy advance tax collections, witnessing the highest growth rate since 2008, indicating encouraging fiscal results as well. However, soundin cautious on the gains seen in the markets over the past few sessions, Nilesh Shah, President (corporate banking), Axis Bank, said, "It is difficult to predict the markets in the short-term, especially after it has rallied for eight consecutive days. The valuations of Indian markets were at a reasonable level compared to its global peers. That is the reason why foreign institutional investors (FIIs) have put money into India."

Moving on to the significant stock movements so far, auto firm Mahindra & Mahindra was the top Sensex gainer at Rs 738 up 4%, followed by BHEL at Rs 2,188 also upalmost 4% after the company declared its FY 2010-2011 provisional net was up 40%, while Jaiprakash Associates was up 3%. Banking major HDFC Bank was also up 3%, followed by Infosys, L&T, Jindal Steel, Hero Honda, Maruti Suzuki and ICICI Bank all up 2% each.

Reliance Communications at Rs 109 down more than 2% due to investigations into its alleged involvement in the 2G scam, was the top loser on the Sensex, while Cipla at Rs 316 and FMCG major Hindustan Unilever at Rs 280 were both down 1%.

The Mid-cap index moved in line with the Sensex at 7,105 up nearly 2%. Major gainers in this space were Patel Engineering at Rs 172 up 16%, Fresenius Kabi at Rs 101 up 11%, Future Capital at Rs 158 up 10% and SRF at Rs 353 up 9%. Talking about the mid-cap sector, Nandish Patel, a derivative analyst from Sharekhan, said, "Select midcap stocks has seen good addition and also options data are showing good sign so we may see stock specific movement in midcap stocks."

Small-cap stocks outperformed the benchmark, and the index was up 3% at 8,596. The significant gainers on this index were PI Industries at Rs 686 and English Indian at Rs 54, both up 17%, followed by Om Metals at Rs 47 up 16%, CCL Products at Rs 225 up 15% and West Coast Paper at Rs 98 up 14%.

Amongst the sectoral indices, the Capital Goods index topped the chart at 13,677 up 2.5%. BGR Energy up 8% at Rs 539 was the highest gainer, followed by Alstom Projects at Rs 624 and Pinj Lloyd at Rs 72 both up 6%. Thermax at Rs 662 was up 5%, while Havells India at Rs 393 moved up 4%.

IT stocks saw a significant degree of buying, and the index advanced 2% at 6,655. Financial Technologies was the top gainer on the index at Rs 918 up 4%, while HCL Technologies at Rs 481 and Oracle Financial at Rs 2,036 were both up 3%. Core Porjects gained nearly 3% at Rs 322, while Tata entity TCS at Rs 1,210 advanced about 3%. Infosys at Rs 3,292 and Tech Mahindra at Rs 702 were up 2% each. Commenting on the IT space, Devangshu Datta, a technical analyst said, "The CNXIT may hit 7,250-7,275 where there's a lot of resistance; one can expect support at 7,150 -7,175."

The Bankex advanced 2% at 13,448. Amongst the top gainers, Union Bank at Rs 354, HDFC BAnk at Rs 2,398 and IDBI Bank at Rs 149 were all up 3%.

With 2,405 advances and 477 declines, the market breadth was extremely positive.

Most major Asian markets closed in the green today, with Japan's Nikkei at 9,719 moving up negligibly, and the Shanghai Composite gaining a little over 1% at 2,967. The Hnag Seng scaled up 1.5% at 24,151, while Singapore's benchmark, the Straits Times, closed up 0.7% at 3,141.The Taiwan Weighted ended up 0.3% at 8,705, while conversely, the Seoul Composite declined 0.2% to 2,116 at close.