Markets end higher led by financials

Banks, autos, oil&gas lead gains

Indian shares ended higher on Wednesday, amid a rally in global shares as the US fiscal cliff was averted, with the Nifty topping the psychological mark of 6,000 in intra-day trade led by financials. At the close, the Sensex was up 133 points at 19,714 and the Nifty added 42 points to end at 5,993.

Earlier in the day, the Nifty touched a high of 6,006, breaching the 6,000 mark for the first time in two years and the Sensex saw a high of 19,757.

The deal the US Congress approved- a rare tax increase- will hit the nation's wealthiest households in a bipartisan budget deal that stops the world's largest economy from falling into a deep fiscal crisis and recession.

On the domestic front, manufacturing activity surged to a six-month high in December, boosted by strong factory output and a spike in new orders, both of which hit their highest levels since June, a business survey showed on Wednesday. The HSBC Markit India Manufacturing PMI, which gauges the business activity of India's factories but not its utilities, jumped to 54.7 in December from 53.7 in November, its biggest monthly rise since January 2012.

Meanwhile the rupee strengthened by 29 paise to trade at  Rs 54.40 against the US dollar in early trade today at the Interbank Foreign Exchange on increased dollar selling by exporters and banks amid sustained foreign capital inflows.

Asian and European markets cheered the developments in the US as a major risk for investors, namely a slump in the global economy, appeared to have receded for now.  In Europe, CAC, DAX and FTSE gained nearly 2% each.

In the Asian markets, Hang Seng up nearly 3% was the top gainer followed by Shanghai Composite, KOSPI Composite, Taiwan Weighted, Straits Times which added 1% each.

Back home, in the broader markets, the smallcap index outperformed with nearly 1% gain as compared to the midcap index up 0.6% and Sensex up 0.7% respectively.

Among the sectoral indices, except FMCG and IT indices, all the others closed in the green with Consumer Durables, Capital Goods, Oil & Gas, Bankex and Auto indices leading gains, up over 1% each.

FMCG index slipped into red as index heavyweights ITC and Hindustan Unilever dipped 0.6% and 0.2% respectively.

The IT packed was weighed down by Infosys, TCS and Wipro which closed in the red, down 0.03-0.8%

Banks gained as hopes of a January rate cut resurfaced. SBI, ICICI Bank, Axis Bank, Yes Bank and Indusind Bank gained between 1-2%.

Metals continued to shine with Sterlite, Hindalco, Sesa Goa, Jindal Steel and SAIL leading gains, up 0.7-3%.

Oil & Gas advanced as index heavyweight Reliance Industries, advanced nearly 1% followed by gains in Gail India ,ONGC, BPCL and HPCL adding 2% each.

All the major auto names closed higher on the back of encouraging December sales figures. Of them, Bajaj Auto was the top gainer up 3% after the company said its total sales in December increased 13% year-on-year to 343,946 units, due to higher demand for motorcycles and rise in exports.

Tata Motors was up 0.5% after reporting total sales of commercial and passenger vehicles at 65,582 units (including exports) during December. Also, Bank of America-Merrill Lynch upgraded Tata Motors to 'buy' from 'neutral' and raised its target price to Rs 360 from Rs 285.

Maruti Suzuki and Hero MotoCorp were the other auto names to close higher by 2.7% and 0.3% respectively.

The other notable gainers from the Sensex pack included Bharat Heavy Electrical Limited which ended higher by 2% as the government has imposed 35% safeguard duty on electrical insulators imported from China.

L&T, HDFC, NTPC and Cipla up 0.7-1.5% were the other prominent names to close in the green.

Among other stocks, KEC International moved higher by 6 6% at Rs 71.30 after the company said it has secured new orders worth of Rs 1,511 crore in its transmission, power systems and cable business from India, Oman, Nepal and Americas.

PC Jeweller has surged 6% to Rs 175, extending its previous day’s over 10% rally on the Bombay Stock Exchange.

Royal Orchid Hotels rallied 6% to Rs 45.75 after its board approved the debt restructuring plan.

Gitanjali Gems soared 8% to Rs 585, on back of over two-fold jump in trading volumes on the NSE.

The market breadth was very positive. 1797 stocks advanced while 1166 stocks declined on the BSE.