Markets gain as Nov WPI cools

Bharti Airtel drops while Tata Motors gain

After a sluggish start markets firmed up in late morning trades led by rate sensitive shares after lower-than-expected November wholesale price inflation rekindled hopes of a rate cut by the central bank at its monetary policy meet next week.

November inflation fell to 7.24% from 7.45% in October, government data showed on Friday. The street was expecting November WPI to be around 7.6%.

At 11:40AM, the Bombay Stock Exchange's Sensex index rose 58 points and traded at 19,288 while the National Stock Exchnage's Nifty-50 index gained 15 points to  5,866.

Asian shares also traded mixed as positive China's flash purchasing managers' index for December hit a 14-month high, however, gains were capped over looming US fiscal cliff woes.

China's Shanghai Composite gained 4% to 2,149, Hong Kong's Hang Seng was up 0.6% to 22,586, Singapore's Straits Times gained 0.2% to 3,163 while Japan's Nikkei fell 0.05% to 9,738.

The MSCI Asia Pacific index outside Japan rose 0.05% to 902 in late morning trades.

Back home, capital goods, real-estate, autos and metal indexes rose while consumer durables, banks and fast moving consumer goods sector led declines on BSE.

Among key Sensex stocks, in technology space, Wipro and TCS gained 1% while among automobiles, Tata Motors, Maruti Suzuki and Mahindra and Mahindra rose over 0.5% on BSE. The laggards include, ITC which fell 1%, ICICI Bank dropped 0.6% while Bahrti Airtel was down 1.5%.

Bharti Airtel, country's biggest mobile-phone operator's  arm, Bharti Infratel's initial public offering for up to $830 million was fully covered on Thursday amid lukewarm response from retail and NIIs..

The other notable movers include, Shares of fertiliser companies rallied up to 18% in opening deals after the Cabinet Committee on Economic Affairs (CCEA), on Thursday, approved a urea investment policy, which is likely to incentives fertilizer companies to set up new plants and expand existing capacity.

Fertilisers and Chemicals Travancore (FACT) has rallied 18% to Rs 32.60 on the BSE. National Fertilisers, RCF, Chambal Fertilisers, GSFC and Deepak Fertiliser are trading higher by 2-5%.

Public sectors banks such as  Punjab National Bank, Bank of Baroda and Canara Bank fell 0.5-1.5% after the rating agency Moody's revised the rating outlook to negative from stable due to worsening asset quality.

ABG Shipyard gained 2% after the company has bagged a repeat order worth Rs 485 crore from the Ministry of Defence for building an additional cadet training vessel for the Indian Navy.

Honeywell Automation India has dipped almost 7% in opening deals after its promoter - Honeywell Asia Pacific Inc. - fixed the floor price for the offer-for-sale (OFS) at Rs 2,150, a 10% discount to Thursday’s closing on the BSE.

Geodesic is down almost 5% for eighth day in a row, and was locked in lower circuit at Rs 29.45 with no buyers on the counter after the company said that lenders have invoked large number of pledge shares held by them.

The BSE mid-cap rose 0.4% while small-cap gained 0.02%.

The overall breadth is positive as 1,207 stocks have advanced while 1,200 stocks declined on the BSE.