Markets open firm; banks, auto shares rally

Markets opened on a firm note led by firm global cues and easing oil prices. The Sensex was up 140 points, at 18,578 and the Nifty advanced 39 points, at 5558.

Oil prices pulled back with Brent crude falling over 2% to $122.63/bbl after reports that OPEC would increase production to put on a lid on rising prices.

US markets ended in the green buoyed by easing crude and profit forecast from Bank of America. The Dow Jones industrial average gained 1%, The Standard & Poor's 500 Index added 0.9% and the Nasdaq Composite Index rose 0.7%. Asian markets were also trading higher following firm cues from the US. China's Shanghai Composite gained 0.3% on reports that the Chinese Central Bank has reversed the previous rise in reserve requirements. Hong Kong's Hang Seng also advanced 0.6% led by gaining in Chinese Banks on rosy earnings outlook of Chinese Banks. Japan's Nikkei 225 rallied 1% on back of strengthening dollar and gains in exporter shares.

In India, markets are expected to continue the positive momentum after the index closed the bearish gap of Monday and regained strength 5500 level. Edelweiss in the morning note said, "Broadly the index has formed a trading range between 5400-5650 with an upward bias; hence one can look to look to initiate long trades at current levels."

BSE Realty and Banking shares were leading the sectoral pack, up 1.1% and 1% each. From realty space, Orbit Corporation was up 2.2%, DB Realty advanced 1.9% and Mahindra Lifespace was up 1.8%.

Auto shares were also in the top gear, the index was up 0.7%. Auto Ancillary Apollo Tyres was the top gainer, up 1.6%, Bajaj Auto was also up 1.6% and Maruti Suzuki climbed 1.1%.

Top gainers on the Sensex were DLF, up 1.6%, Bajaj Auto gained 1.6% and Hindalco Industries advanced 1.3%. Only four components on the Sensex were trading in the red, Cipla fell 0.2%, Sterlite was off 0.2% and Bharti Airtel declined marginally by 0.1%.

Among the broader markets, midcap and smallcap indices were up 0.7% and 0.8% each. Market breadth was positive, 1137 stocks advanced for 326 stocks that declined.