Sensex stages pulls back; ends 160 points higher

The sentiment got a boost after latest data from US pointed to a brisk recovery in the manufacturing activity sparking off a rally in stocks around the globe

Markets recouped most of yesterday's losses to end higher on Friday helped by a rebound in bank shares while encouraging data from the US boosted sentiment for IT shares.

The 30-share BSE Sensex added 0.8% or 164 points at 20,700. and the 50-stock NSE Nifty index was up 1.05% or 64 points at 6,155 levels.

All the sectoral indices, except Realty index (down 0.1%), ended with gains. BSE Capital goods index, up 1.2%, was the top gainer followed by FMCG, Bankex, IT which ended over 1% higher.

Broader markets too remained upbeat with BSE mid-cap and small-cap indices adding between 0.4-0.7%.

The market breadth was very positive on the BSE. 1480 stocks advanced while 1182 stocks declined

The rupee is trading higher at 62.14-a-dollar versus its close of 62.26/27 on Thursday. The pair is expected to hold in a 62 to 62.50 range during the day, dealers say.

InFocus

Outlook on Indian equities remained grim, said global banking giant HSBC in a report, as weak consumption and stalled investments prevent the economy from building any sort of momentum. The year 2014 could thus prove to be a tale of two halves. In the latter half of the year, there would be some economic recovery and return to normal business conditions.

"Pent-up demand should be released after the elections are over," HSBC said in a research note adding that "given that passions are running high, the outcome could bring considerable volatility to Indian equities."

HSBC for now is "underweight" on Indian equities but some of its preferred sectors include energy which is likely to gain from subsidy changes, power (stands to benefit from distribution reform), non-ferrous metals (corporate restructuring) and telecom (more clarity post the auctions).

Movers and Shakers

Shares of HCL Technologies closed 4% higher at Rs 1,538.20, after hitting a record high in late noon deals on NSE after the holding company denied a Wall Street Journal report that said its founder Shiv Nadar was seeking potential buyers for his $10 billion stake in the technology company.

Shares of mid-and-small-sized information technology (IT) shares rallied by up to 19% on back of heavy volumes on the bourses.

Geometric, R Systems International, NIIT, Polaris Financial Technology, Nucleus Software, Infinite Computer Solutions (India), NIIT Technologies, Ramco Systems and Thinksoft Global Services added 5-16% on the Bombay Stock Exchange in the day's trade.

Cement shares which have remained lacklustre over the past few weeks surged in late trades today amid short covering and value buying at lower levels. Further, the Cabinet note late Thursday to convert state roads into national highways seems to have boost sentiment. UltraTechCement, Ambuja Cements and ACC ended 5-6% higher on Friday.

IL&FS Transportation Networks surged 3.6% on reports that the infrastructure company through its subsidiary in Spain, Elsamex SA, bagged a contract worth $216.7 million to build roads in Botswana.

Around the globe

On the global front, Japan's Nikkei share average led the gains in Asia with a 2.8 percent surge. European shares were upbeat too with both Britain's FTSE and France's CAC adding between 0.1-0.3%.

On Wall Street, the S&P 500 rose 0.6 percent, cheered by Markit's preliminary U.S. Manufacturing Purchasing Managers Index accelerating to its best level in four years.