Sensex up over 200 points, Nifty at 7,800; Bank, auto stocks lead

Markets continued to trade firm tracking strong performance among global peers with index heavyweights and financials leading the gains.

Global shares have rallied after the US Federal Reserve's meeting minutes sent strong signals of a rate increase in December, a vote of confidence in the health of the world's largest economy and a boon for the banking sector.

At 11:50 am, the Sensex has surged 258 points to trade 25,741 at and the Nifty has soared 76 points to trade at 7,806. In the broader markets, BSE Midcap and Smallcap indices are up almost 1%.

According to Motilal Oswal market outlook, "Breakdown level of 7,870 holds valid as Nifty reverses towards recent swing support near 7,700 & remains a valid stop for existing shorts. As the reward to risk is diminishing for a fresh short trade, it is recommend to hold on to existing shorts till Nifty shows signs of revival i.e. above 7,870.

"While shorts in futures has added fresh bearish bias, 7,700 Puts still is heaviest without unwinding indicating expectation of the same to be held. On the higher side pull back if any could be slow above 7,900 and may not cross 8000 (Heaviest Call)," the report further added.  

The rupee recovered by 24 paise to 66.06 against the dollar on increased selling of the US currency by exporters and banks amid higher opening in the domestic equity market.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 768.46 crore yesterday as per provisional data released by the stock exchanges.

Among key stocks, Dr Reddy’s Laboratories has recovered from day’s low and are trading lower by nearly 2%. The stock dipped 7% to Rs 3,138, its lowest level since February 11, 2015 on the National Stock Exchange (NSE).

The Union Cabinet on Wednesday approved a 10% stake sale in Coal India (CIL) and initial public offering (IPO) of Cochin Shipyard (CSL). The stock has slipped by almost 1%.

Hero MotoCorp is the top gainer, up nearly 4% at Rs 2,667 on the BSE. Other notable gainers are Bajaj Auto, ICICI Bank, Maruti Suzuki, Infosys and Axis Bank.

Shares of railway-related companies are in focus after the government approved Rs 8,349 crore investments on rail freight lines in three states.

Titagarh Wagons, Texmaco Rail & Engineering, Kalindee Rail Nirman and Hind Rectifiers have gained between 5-8%.

Among sugar segment, Shree Renuka Sugar, Balrampur Chini, Bajaj Hindusthan Sugar, Dhampur Sugar have slumped between 5-10% on account of profit booking.