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Benchmark indices are trading on a higher note amid volatility led by buying among capital goods, metal and realty shares.
By 10:10, the Sensex was 107 points at 21,186 mark and the Nifty gained by 33 points at 6,307 levels.
Adds Salil Sharma, technical analyst & partner at kapursharma.com, "For the short term the Nifty is seen heading upwards. The target and resistance is at 6,357 which also happens to be its all-time high. Being a truncated week chances of the Nifty topping that level is in the next month. Meanwhile, the broad range will be 6,230 and 6,350."
The market sentiment is also boosted by data showing that foreign funds remained buyers of Indian stocks on Friday.
Foreign institutional investors (FIIs) bought shares worth a net Rs 990.19 crore on Friday, 20 December 2013, as per provisional data from the stock exchanges.
The direction of foreign institutional inflows and the rupee against the dollar would be deciding the stock market trend in the truncated trading week ahead.
Volatility may heighten ahead of the December series futures and options expiry on Thursday. Financial markets will be shut on Wednesday, on account of Christmas.
Asian stocks inched cautiously higher on Monday encouraged by record highs on Wall Street, though anxiety over a credit squeeze in China has weighed on shares there while adding to pressure on emerging market currencies.
There was some relief when China's benchmark short-term money rate opened sharply lower at 5.57%, which was enough to help Shanghai edge up 0.15%.
MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.5%.
Back home, the rupee is trading at 61.94/95 versus its close of 62.04/05 on Friday, tracking slight gains in most Asian sharemarkets.
On the sectoral front, BSE Capital Goods, Realty, Oil & Gas, Metal, Power, Auto, Healthcare and Bankex indices have surged between 1-2%. Infact, all the major BSE sectoral indices are trading in positive zone.
The main gainers on the Sensex at this hour include Hindalco, JSPL, BHEL, Tata Steel, Hero Moto, Sesa Sterlite, Bajaj Auto, L&T, GAIL and Dr Reddy’s.
L&T gained after L&T Infrastructure Development Projects (L&T IDPL), a subsidiary of the company has submitted an application to the Foreign Investment Promotion Board (FIPB) seeking approval in relation to a proposed foreign direct investment in L&T IDPL.
Auto stocks are in focus after PSU OMCs hiked the petrol price on Friday by 41 paise a litre following the government's decision to raise commission paid to petrol pump dealers and firming global oil rates. Simultaneously, diesel rates were increased by 10 paise per litre due to a hike in dealers' commission.
On the losing side, Infosys, M&M, Tata Power, HDFC Bank and Bharti Airtel have declined between 0.1-1%.
Infosys has dropped by 0.9% after the company announced after market hours on Friday the changes to the board of directors of the company. V. Balakrishnan has conveyed his intention to resign as a member of the board and from the services of the company.
The board places on record deep sense of appreciation of the services rendered by Mr. V. Balakrishnan during his tenure as the member of the board, Chief Financial Officer of the company and then as the Member of the Board in-charge of Infosys BPO, Lodestone, Finacle, India Business Unit and Global Immigration.
Among other shares, shares in United Spirits Ltd fell as much as 6% on Monday after a court ordered the annulment of the sale of the Indian spirits maker to British group Diageo.
The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up by nearly 1% each.
The market breadth in BSE remains firm with 986 shares advancing and 287 shares declining.
