Sensex ends 107 pts higher; cap goods, metals, autos rally

The market retained its upmove on the first day of February, showing a nice follow-up to the January rally. It smartly rebounded in last couple of hours of trade - especially after positive European cues post China's PMI data.

Equity benchmarks closed nearly two-month high; the Sensex rose 107.03 points, to close at 17,300.58 after showing 239 points recovery from intraday low of 17,061.55. The Nifty closed above 200 daily moving average, up 36.45 points to 5,235.70 led by metals, auto, capital goods, and index heavyweights Reliance and L&T.

However, experts expect correction soon as the market rallied more than 11% in January.

PN Vijay, Portfolio Manager of www.askpnvijay.com feels that the market will have a correction very soon as it has gone up extremely sharply.

"The market needs to take a pause because it has been driven by flows, and today helped good European cues. But Q3 results have been very mixed, the underpinning of the fundamentals don't justify this sharper move and I am envisaging that we will have a correction very soon," he reasoned.

At 15:02 hours IST : Nifty spikes on positive European cues; RIL, L&T lead