Markets surge; Fed stimulus bets spark rally

Tata Motors and Maruti Suzuki gain 4% and 3% respectively, ICICI Bank and SBI up 3% and 2%, Reliance Industries adds 2%

Markets added gains in afternoon session this Tuesday, moving in line with global peers amid speculation that the US Federal Reserve will continue with monetary stimulus in the wake of sluggish growth in world's biggest economy.

Global risk-appetite was firm after Janet Yellen, the Federal Reserve's vice chair, said on Monday that US central bank's aggressive monetary stimulus is warranted given how far the economy was operating below its full potential coupled with news flow from China  which maintained its economic-growth target at 7.5 percent for 2013.

Adding to the domestic investor's optimism was the policy action by the Reserve Bank of India to support growth in Asia's third-biggest economy which supported buying in banks, automobiles and real-estate sectors.

At 2PM, the Bombay Stock Exchange's Sensex surged 255 points and traded at 19,133 while the National Stock Exchange's Nifty gained 79 points at 5,778.

Asian markets traded higher with China's Shanghai Composite Index gaining 2.3% to 2,326 , Singapore's Straits Times added 0.36% to 3,251 , Hong Kong's Hang Seng  rose 0.1% to 22,560 while Japan's Nikkei gained 0.3% to 11,683.

In Europe, France's CAC rose 1% to 3,749, Germany's DAX gained 1% to 7,775 while UK's FTSE was up 0.6% to 6,385.

Back home, among sectors, barring consumer durables, rest all gained with, real-estate, metals, IT,autos, healthcare, bankex leading the gains on BSE.

Among individual stocks, Tata Motors and Maruti Suzuki gained 4% and 3% respectively, ICICI Bank and SBI rose 3% and 2%, Reliance Industries added over 2%, Jindal Steel, Sterlite & Hindalco rose 4% each, HUL up 0.8% on BSE.

The laggards included, Bajaj Auto dropping 0.6%, NTPC fell 1%, Bharti Airtel declining 0.1% on BSE.

Among other notable movers, Steel Strips Wheels has soared 12% to Rs 171 in noon deals after the company registered a 63% year-on-year growth in export sales of 88,020 steel wheel rims during the month of February 2013. The company had sold 54,014 steel wheel rims in the same month of previous year in overseas market

Tata Motors is trading higher by 3% to Rs 297 on reports that the company has slashed the prices of its Indica and Manza range of passenger cars by up to Rs 50,000 in order to prevent falling sales in recent months.

The broader markets traded gained with mid-caps and small- caps rising nearly 1% on BSE.

The market breadth was firm. Out of 2,766 stocks traded , 1,520 stocks advanced compared to 1,133 declined on BSE.