Sensex gains nearly 300 pts; Infosys, ONGC up 3%

Benchmark indices have extended early gains led by buying among oil & gas, information technology and banking shares.

By 10:10 AM, the Sensex zoomed by 289 points at 21,048 and the Nifty rose by 78 points at 6,250 levels.

Ravi Nathani, technical analyst, Nsetoday.com says, “Nifty has bounced from its strong support of 6160, now expect markets for a big rally in short term whereas chances are we might see new high once again. Best trading strategy for traders would be buy on dips with a strict stoploss of 6160 as per closing basis.”

Asian markets are trading mixed today.

Foreign institutional investors (FIIs) were gross buyers of debt securities worth Rs 8,155 crore and sellers of bonds to the tune of Rs 4,609 crore till January 10, resulting in a net inflow of Rs 3,546 crore, according to Sebi data.

Back home, the rupee is trading at 61.55/56 after hitting 61.52 at open, its highest since December 12 and below its close of 61.89/90 on Friday.

India's economic woes worsened on Friday with a surprise contraction in industrial production and a wider trade deficit, adding to troubles of the ruling alliance as it heads into a tough national election seeking a third term.

Inflation data for December will be released today.

On the sectoral front, BSE Oil & Gas and IT indices have spurted by over 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.

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.

Tata Motors is trading higher by 3% at Rs 378 after its British subsidiary Jaguar-Land Rover (JLR) has reported a strong 21% year-on-year growth in retail sales at 40,635 units for the month of December 2013.

Other notable gainers are ICICI Bank, TCS, Wipro, L&T, BHEL, M&M, Hindalco and Axis Bank.

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 1,133 shares advancing and 491 shares declining.