Markets gain on inflation data, metals shine

The markets ended in the positive zone for the third straight day bolstered by monthly inflation data and rally in consumer durables and metal stocks. The Sensex ended 107 points higher at 19,799 today, and has gained  around 560 points in the last three days.

The NSE Nifty ended at 5,944 - up 36 points.

Inflation eased to 7.48% in November indicating that central bank may pause rate hike on Thursday, and focus on easing the cash crunch.

With Inflation declining marginally, analysts expect some policy action on Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio front. "Inflation in India is primarily a supply side issue. I feel that there may not be a rate hike in this policy. However, the RBI may tweak Statutory Liquidity Ratio (SLR) and cut Cash Reserve Ratio (CRR) because of tight liquidity conditions and advance tax pay-out," Gopal Agrawal, Head of Equities, Mirae Asset India said.

Asian markets also creeped higher amid cautious trading. China's Shanghai Composite Index rose 0.1%, Hong Kong's Hang Seng Index gained 0.5%, Japan's Nikkei Stock Average was flat, South Korea's Seoul Composite was up 0.6%

Metal stocks have been on the buzzer for the second consecutive day on steel price hike buzz and Manganese Ore India Limited (MOIL) listing tommorow. Additionally, Copper prices have risen globally which has also perked up buying interest in the metals after China refrained from raising interest rates.

Welcorp surged 4% in teh metal space to Rs 171. Sterlite jumped 3.5% to Rs 171. JSW STeel, Tata Steel and Hindalco added 1.5% - 3% each.

Hindustan Zinc, Bhushan Steel, Jindal Saw and Nalco were the other metal gainers.

Analysts are positive on commodity markets in the short-run. "Near term outlook is positive on back of severe winter, QE-II and global recovery. If recovery in US sustains at these levels, it will be positive for commodities," Agrawal said.

Consumers Durables have been buzzing on upbeat holiday season. VIP Industries soared over 10% to Rs 609.

Gitanjali Gems surged 7.5%, followed by Rajesh Exports and Titan Industries.

Among the Sensex stocks, Reliance Infrastructure added 2.6% to Rs 833.

Tata Motors, SBI, Larsen & Toubro, NTPC and Wipro added 1-2% each. Market heavyweight, Reliance, moved up 1% to Rs 1,053.

Other gainers included Bharti Airtel, Cipla, ITC and DLF.

Meanwhile, Hero Honda shed 3.3% at Rs 1,714. Jindal Steel dropped 1.4% while Mahindra & Mahindra dropped 1.3%. HUL, Maruti Suzuki and Reliance Communications were also among the losers.

Broader markets outperformed. Mid-cap index jumped 1.5% to 7,651. Small-cap index was up 1.6% at 9,283.

BSE market breadth was positive. Out of 2,991 stocks traded, 1,929 had advanced while 937 had declined.