Markets extend gains led by index heavyweights

The main gainers on the Sensex at this hour include Sun Pharma, M&M, Bharti Airtel, BHEL, HDFC, Hero Moro and Maruti Suzuki, all gaining between 1-3%

Benchmark indices have extended gains led by buying among index heavyweight shares like HDFC, Infosys and Reliance Inds. Markets lost ground in early trades after the RBI maintained status quo on key policy rates.

Chandrajit Banerjee, Director General, CII: ““The decision of the RBI to hold policy rates on status quo is disappointing. At a time when both growth and inflation dynamics call for an accommodative monetary policy, the RBI has taken a cautious approach of attending to the prospect of a possible resurgence in inflation over reviving growth in the economy",  he added.

At 13:20PM, the 30-share Sensex was up 89 points at 19,268 and the 50-share Nifty was up 26 points at 5,834.

According to Nandish Patel, derivative analyst at Sharekhan, “On Friday, inspite of market being up by 100 points, we have seen short positions have built up at higher levels as Nifty futures has added 23k shares in open interest with premium shifting into discount. The VWAP levels of 5850 might act as a stiff hurdle and unless and until market is trading below this level, we think that market may witness a bounce but 5850 on closing basis will act as a hurdle.”

On the global front, Asian shares recouped early losses on Monday but prices were capped as investors settled in to wait for the US Federal Reserve meeting outcome later in the week - and some long-awaited clarity on its intentions for monetary stimulus.   

Uncertainty over the Fed's future policy course has triggered a sharp sell-off in broad risk assets over the past few weeks, offering dip buying levels for some Asian equities.  

Back home, the rupee appreciated after the release of the mid-quarter review of the monetary policy statement in which the Reserve Bank of India (RBI) kept the repo rate unchanged at 7.25%.

Trade data for May released today showed the country's exports at $24.51 billion versus $24.16 billion on month. Imports in the same month stood at $44.65 billion versus $41.95, up 7% from a month ago.

Meanwhile, Commerce Secretary, SK Rao today said that a revamp in the Foreign Direct Investment policy may propose 100% FDI in DTH.

On the sectoral front, BSE Capital Goods, Consumer Durable, Healthcare and Auto indices have gained between 0.6-1.2%. However, BSE Metal and PSU indices are trading marginally lower.

The main gainers on the Sensex at this hour include Sun Pharma, M&M, Bharti Airtel, BHEL, HDFC, Hero Moro and Maruti Suzuki, all gaining between 1-3%.

Bharti Airtel has moved higher by 2.4% to Rs 296 after the telecom services provider has allotted around 200 million shares to Doha-based Qatar Foundation Endowment (QFE) for around Rs 6,796 crore.

On the losing side, Hindalco, Tata Motors, Dr Reddy’s Lab, Sterlite and TCS have declined between 1-2%.

The market breadth remains almost neutral with 1,002 shares advancing and 1,043 shares declining.