Sensex hits 21,000 in opening deals; IT & oil shares zoom

BSE Oil & Gas and IT indices have spurted by nearly 2%

Benchmark indices have surged in opening trades supported by oil and gas, software and bank shares along with Asian markets leading the gains.

By 9:30, the Sensex gained by 242 points at 21,000 and the Nifty rose by 66 points at 6,228 levels.

Third quarter earnings from blue-chips such as TCS, RIL and Wipro and inflation data for December will dictate the near-term trend on the bourses, say experts.

Besides, trend in investment by foreign institutional investors, global cues and movement of rupee against the US dollar will also influence the market trend.

The S&P 500 and the Nasdaq ended modestly higher on Friday, led by gains in defensive names after a weaker-than-expected payrolls report raised new questions about both the strength of the economy and the aggressiveness of Federal Reserve stimulus.

For the week, the S&P 500 rose 0.6%, while the Nasdaq climbed 1%. The Dow Jones industrial average finished the week down 0.2%.

Asian markets were trading firm on Monday. China's Shanghai Composite rose 0.28% or 5.58 points at 2,018.87. Hong Kong's Hang Seng was up 0.15% or 35.19 points at 22,881.44. South Korea's Seoul Composite added 0.65% or 12.63 points at 1,951.17.

Back home, BSE Oil & Gas and IT indices have spurted by nearly 2% each followed by counters like Banks, Capital Goods, Realty, Power, FMCG, Auto and Consumer Durables, all gaining by 1% each. Infact, all the major BSE sectoral indices are trading in green zone.

Shares of oil and gas companies are trading higher by up to 3% in early morning deals on the BSE after the government has officially notified the new gas pricing policy that would be applicable to all the domestically produced gas from April 2014 which will be effective for five years.

Oil and Natural Gas Corporation (ONGC) has rallied 3% to Rs 292, while Reliance Industries (RIL) was up 2.3% at Rs 876 on the BSE.  Oil India, IOC, BPCL, Cairn India, Petronet LNG and HPCL are up 1-2%.

As per the new pricing mechanism, the new gas price is likely to be US$8.4/mmbtu for FY2015. Currently, the gas prices are in the range of US$4.2-5.7/mmbtu for domestically produced gas.

IT majors like Infosys, TCS and Wipro have surged between 2-3%.

Infosys has rallied over 3% to Rs 3,660, also its record high on the Bombay Stock Exchange (BSE). Shares of the country’s second-largest software services provider has surged 6% in past two trading sessions after posting 145bp quarter-quarter (qoq) growth in EBIT margin to 25.0% for the third quarter ended December 2013 (Q3), led by operational efficiency with inch up in utilization level and sequential decline in S&M spends.

Other notable gainers are RIL, Tata Motors, ICICI Bank, Wipro, L&T and BHEL.

The broader markets are under performing the benchmark indices- BSE Midcap and Smallcap indices are up nearly 1% each.

The market breadth in BSE remains firm with 779 shares advancing and 224 shares declining.