Sensex eyes 27,200 mark; BSE IT index up 2%

Benchmark indices are trading near day’s high led by technology shares after upbeat US economic data signalled that growth in the world's largest economy is gaining momentum.

At 11:10 AM, the 30-share Sensex was up 161 points at 27,181 and the 50-share Nifty was up 45 points at 8,125.

Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on Tuesday, as per provisional data from the stock exchanges.

Indian services activity expanded at its weakest rate in three months in August as firms' order books filled up at a slower pace, a business survey showed on Wednesday.

The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 50.6 in August from 52.2 in July. A number above 50 denotes growth while anything below implies contraction.

The rupee is trading at 60.58 versus Tuesday's close of 60.68/69. Gains in the domestic share market are aiding sentiment for the Indian unit. Foreign fund flows will remain in focus.

GLOBAL MARKETS

Asian shares shrugged off early losses on Wednesday, while the dollar was close to 14-month highs against a basket of major currencies after data underscored that the US economy continues to gather gradual momentum.

The Institute for Supply Management said its US manufacturing activity index rose to 59.0 in August, the strongest since March 2011. July construction spending was at its highest level in over 5-1/2 years.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.4%. It opened lower after Wall Street marked a mixed day, though the upbeat US economic data underpinned shares and limited losses.

SECTORS & STOCKS

BSE IT and TECk indices have spurted by over 2% each followed by counters like Consumer Durables, Capital Goods, Healthcare, Metal and Realty, all gaining by 1% each. However, FMCG and Banks are trading marginally lower.

The technology stocks have gained in the morning trades on the back of firm U.S. manufacturing activity data. The U.S. manufacturing activity hit a nearly 3-1/2-year high last month and construction spending rebounded strongly in the month of July.

IT majors Infosys TCS, Wipro, Mindtree and HCL Tech have gained between 1-2% on the BSE.

Bharti Airtel has climbed 3% to Rs 404.65, extending its previous day’s nearly 4,2% gain on the BSE , after the company said it's arm signed an agreement to acquire over 2.7 million subscribers of yuMobile.

Tata Motors has surged more than 2% to Rs 528 on the BSE after receiving an order of approximately 2,700 Urban buses under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM)- II scheme.

Other notable gainers are Sesa Sterlite, Coal India, Sun Pharma, Tata Steel and Tata Power.

On the losing side, IRC, GAIL, Hero Moto, ICICI Bank and Bajaj Auto have slipped between 0.5-1.2%.

The broader markets continue their outperformance as compared to benchmark indices- BSE Midcap and Smallcap indices have gained by nearly 1%.

The market breadth in BSE remain healthy with 1,477 shares advancing and 964 shares declining.