Sensex surges nearly 300 points; Infosys, TCS up 1%

Markets extended gains led by financials and capital goods shares coupled with a rebound in IT shares.

Markets extended gains and were trading near their day's highs after the first hour of trade led financials and capital goods shares coupled with a rebound in IT shares.

At 10:45AM, the 30-share Sensex was up 298 points at 26,545 and the 50-share Nifty was up 88 points at 7,930.

Foreign funds were net sellers in equities to the tune of Rs 1,441 crore on Wednesday, as per provisional data on the stock exchanges.

Asian stocks were trading mixed. Shares in Japan pared early gains and were trading lower amid a stronger yen. The Nikkei was down 0.5%. Shares in Hong Kong rebounded after recent correction and the Hang Seng was up 0.9% while Shanghai Composite was down 0.6% and Straits Times was up 0.8%.

All sectoral indices on the BSE were trading in the green. The BSE Capital Goods index was the top gainer up 1.9% followed by Realty, Metal,Bankex and Healthcare among others.

Financials shares firmed up on the back of encouraging growth forecast from IMF. HDFC, ICICI Bank, HDFC Bank, Axis Bank and SBI were up 0.3-1.7% each.

Infosys rebounded from Wednesday's nearly 5% drop following a downgrade by Citigroup. The stock was trading over 0.6% higher ahead of its second quarter earnings due tomorrow. TCS was also up 0.7% while Wipro was up 1.3%. Tech Mahindra was also trading with marginal losses following a downgrade to 'sell' by Citigroup.

BHEL was up nearly 4% after the company received a huge EPC order for 2x660MW rating Supercritical Power Project from TN Generation and Distribution Corp Ltd valued at Rs 7,800 crore. L&T was also up 1.7%

Pharma shares which witnessed selling pressure following reports of US Congress prive probe also rebounded and were trading with gains. Dr Reddy's Labs and Sun Pharma were up nearly 2% each.

Cipla was up 2% after the company said Medpro Pharma has entered into a tie up with Teva Pharmaceuticals affiliate to exclusively sell Teva products in South Africa. Medpro Pharma is a subsidiary company of Cipla Medpro.

Hindalco was up nearly 5% on the back of better than expected third quarter earnings from US-based global aluminium major Alcoa. Hindalco overseas subsidiary Novelis is into the aluminium rolled products business.

Among other shares, Ahluwalia Contracts (India) has rallied 6% to Rs 159 on National Stock Exchange (NSE) after the company said it has secured new orders aggregating to Rs 178 crore for construction of housing project including finishing & electrical works.

8K Miles Software Services has locked in upper circuit of 5% at Rs 571, also its new high on BSE, after the company reported nearly three-fold jump in consolidated net profit at Rs 4.15 crore for the second quarter ended September 30, 2014 (Q2), on back of strong operational income.

In the broader market, the BSE Mid-cap and Small-cap indices were up over 1.4% each.

Market breadth continued to remain strong with 1,714 gainers and 461 losers on the BSE.