Markets strengthen further; trades near highs of the day

Domestic equity markets have strengthened further in the mid morning session, what started with small gains have slowly turned into rally mood and the benchmark indices are currently trading at the high points of the day. Though across the board buying is being witnessed but the metal gauge has suddenly taken the lead after China reported a better than expected GDP numbers for the December quarter that raised hopes of demand recovery from the second largest economy. China's economy in Q4 grew at 8.9% and 2011 GDP was up by 9.2%. All other Asian markets too are trading in green giving positive cues to the markets movement. On domestic front the surge in rupee has boosted the morale of the investors; the Indian rupee is currently trading at its two months high. The worries of Europe too seem to have subsided as ECB President Mario Draghi downplayed the S&P’s mass downgrades but warned that the eurozone situation remains grave.

The BSE Sensex is currently trading at 16,413.97, up by 224.61 points or 1.39%. The index has touched a high and a low of 16,422.61 and 16,270.87 respectively. There were 29 stocks advancing against just one decline on the index.

The broader indices were trading in tandem with the benchmarks; the BSE Mid cap index was up by 1.30% while the small cap index was trading up by 1.38%.

All the sectoral indices on the BSE were in green, the top performers were Metal up by 2.76%, Realty up by 2.33%, Capital Goods up by 2.25%, Auto up by 2.08% and Power sector was up by 1.89%.

The top gainers of the Sensex were Hindalco Inds up by 4.72%, Maruti Suzuki up by 4.17%, Sterlite Industries up by 3.87%, L&T was up by 2.93% and BHEL up by 2.68%.

On the other hand ITC marginally down by 0.025 was the lone loser.

Even as the Union Finance Minister exuded confidence that the headline inflation would moderate between 6 and 7 percent by the end of fiscal year 2011-12, Pranab Mukherjee remained a bit apprehensive over only slight decline in manufacturing inflation and rate of price rise in the power group of items. According to the monthly inflation data, the index for manufactured products, which has weight of almost 65% in the wholesale price index (WPI), slipped only to 7.41% in December as against 7.70% in the previous month.

Finance Minister remained confident that moderation in inflation would continue in the coming months though softening in the prices of manufactured goods, despite the rapid decline in non-food primary inflation, may be more gradual. India’s headline inflation sank below the uncomfortable 9% levels for the first time since December, 2010 to the lowest levels in around two years to 7.47% in December, 2011. The sharp plunge in December headline inflation was mainly due to significant decline in inflation for primary articles including food inflation.

Mukherjee also underscored the fact that with encouraging November industrial production growth, the recent headline inflation figures point at improving overall macro-economic scenario in the second half of 2011-12 and with some policy measures this trend is likely to consolidate in the coming months.

The S&P CNX Nifty is currently trading at 4,945.55, up by 71.65 points or 1.47%. The index has touched a high and a low of 4,948.05 and 4,904.00 respectively.  There were 48 stocks advancing against only 2 declines on the index.

The top gainers of the Nifty were Hindalco Inds up by 4.56%, Maruti Suzuki up by 4.15%, Sterlite Inds up by 4.04%, HCL Technology up by 3.83% and JP Associates was up by3.82%.

On the other hand, Ranbaxy down by 0.70% and ITC down by 0.12% were the two losers on the index.

All the Asian markets were trading in green; Shanghai Composite surged by 1.55%, Hang Seng was up by 1.88%, Jakarta Composite was up by 0.48%, Nikkei 225 gained 0.85%, Straits Times was up 0.98% and Seoul Composite was up by 1.33% and Taiwan Weighted gained 1.44%.