Sensex crosses 16K on Infy push

Buoyed by Infosys Technologies' better-than-expected earnings guidance for financial year 2009, the share prices of software services firms zoomed 3 to 9 per cent on Tuesday on account of short covering on futures and options (F&O) and delivery-based buying in the cash segment.

Indian markets were closed for trading on Monday, a day when key Asian markets saw a sell-off. Belying analysts' forecast that the domestic market will remain weak on Tuesday, the Bombay Stock Exchange's (BSE's) benchmark index, Sensex, gained 346.02 points (or 2.19 per cent) to close at 16,153.66. The broad-based Nifty-50 also rose by 101.85 points (2.13 per cent) to end the day at 4,879.65.

IT stocks were the biggest gainers with Tata Consultancy Services (TCS) notching up 7.37 per cent, higher than that of Infy's, reflecting market expectation that the largest exporter of IT services will deliver better results and guidance than its Bangalore-headquartered counterpart. The IT index gained 203.1 points (5.55 per cent) to close at 3,862.48.

TCS was up with delivery base buying accounting for 29 per cent of the total traded shares. The company witnessed short covering as stock futures went up by 8.88 per cent while open interest (OI) declined by 4 per cent. Wipro gained 4.52 per cent in the cash market and 6.34 per cent in F&O segment on delivery-based buying and short covering.

In fact, HCL Technology started the rally with delivery-based buying of 94 per cent of the total traded shares on BSE. The stock was up 6.78 per cent to close at Rs 245.80 with 33.13 lakh shares changing hands on the bourse.

HCL Tech's April futures closed at 246.60 on NSE with open interest declining by 11.4 per cent largely on account of short covering.

Infy was up 6.81 per cent to Rs 1,510.80 as 29 per cent of the traded shares were taken as deliveries. Its April futures contracts moved up 5.7 per cent to 1,509.05 while open interest (OI) declined by 11 per cent, indicating heavy short covering.

Satyam Computers witnessed fresh long positions in F&O segment with its April futures OI rising 12 per cent and futures 5.63 per cent.

Metal, auto and capital goods sectors continued to suffer from high input costs and expectation of a rate hike after inflation figures touched record highs last week. Brokers are of the view that the market will wait for BHEL and Larsen and Toubro (L&T) results before it makes up its mind on the capital goods sector.

Top gainers among the index stocks, apart from the IT pack, included Ranbaxy Laboratories (up 8.62 per cent to Rs 481.8 a share), which rose after UK's second largest drug-maker AstraZeneca Plc signed a settlement agreement in its Nexium patent infringement litigation against Ranbaxy.

Top losers among index stocks included Hindalco Industries (down 1.59 per cent to Rs 173.55 a share), HDFC Bank (down 0.95 per cent to Rs 1,315.25 a share) and Ambuja Cement (down 0.89 per cent to Rs 116.55 a share).

As per the provisional data, foreign institutional investors (FIIs) were net sellers to the extent of Rs 56.52 crore and domestic institutional investors were net buyers to the tune of Rs 13.27 crore.