Sensex rallies 188 as IT, banks surge; Rel Comm gains 13%

Equity benchmarks rallied after a sedate start on Wednesday, led by demand for banks and IT shares. The Sensex gained 188 points to close at 18414.45, and the Nifty rose 64 points to 5558.70.

However, brokers cautioned that the outlook remained cautious as the market was lacking triggers for a sustainable uptrend.

Reliance Communications led gainers, with the stock rising 13 percent to Rs 73.20 on expectations that the company will be able to come up a credible plan to reduce debt on the balance sheet.

J&K Bank, Reliance Infra, Adani Ports and Hexaware Tech were the other key gainers, up 4-5 percent.

IT shares firmed up ahead of Infosys fourth quarter earnings this Friday, and beaten down bank stocks recovered with brokers attributing it to short covering of positions.

''Politics is overriding things. So, I believe economic outlook, economic reforms or government actions will definitely take a backseat in this kind of a scenario,'' Nishchal Maheshwari, head of research, Edelweiss Capital told CNBC-TV18 in an interview earlier today.

Near term events the market will be closely eyeing include trade balance data, consumer price inflation for March and industrial output for February.

Foreign funds have reduced their purchases of Indian equities, and that has been on eof the key factors putting pressure on the market.

Vetri Subramaniam of Religare Mutual Fund says one should not read too much into recent outflow of foreign portfolio money.

"Keep in mind that we actually got a fairly large sum of money during the previous 12 months. The reasons why the money may have stopped coming in or they are going elsewhere, could be a variety of things," he told CNBC-TV18 in an interview.

"Let us not forget that a lot of portfolio flows are always momentum chasing. If one starts to see momentum in some of the markets I am quite sure that it is the natural tendency of money to flow towards those markets," he said.

Key laggards today included MMTC, Mahindra & Mahindra Financial Services, Glaxosmithkline Consumer, Container Corp and Cummins India, down 2-4 percent.

The market recovered in afternoon trade led by banks, technology and capital goods. The Sensex surged above 200 points on short covering and was at 18441.09 up 214.61 points. The Nifty jumped 65.25 points to be at 5560.35.

Specifically, HDFC (3.1 percent) was the biggest gainer on the Sensex; Wipro (up 2.5 percent), L&T (up 2.5 percent), Cipla and Infosys were also on the buyers' list.

Cairn India was building on yesterday's gains. The buzz is that Cairn Energy, the former parent company of Cairn India, may be taken over by the Anil Agarwal-controlled Vedanta Resources.

Among the midcap stocks, ABG Shipyard was up eClerx Services was up 6.2 percent, Indiabulls Real was up 4.3 percent and Shree Renuka was up 2.9 perecnt.

Meanwhile, Sun Pharma, Jindal Steel, BHEL, HUL and Sterlite Industries were under pressure.

Key equity benchmarks continued to trade volatile, with the Nifty struggling to hold the 5500 mark, pulled lower by commodity and FMCG stocks.

The broader markets too give up all gains and the market breadth deteriorated led by infrastructure stocks like IVRCL, Punj Lloyd, GVK and Adani Power.

At 13.46 hrs IST, the Sensex is up 9.47 points or 0.05 percent at 18235.95, and the Nifty up 3.65 points or 0.07 percent at 5498.75.

Shasun Pharma, however, gains 3 percent as company enters a licensing agreement with a Swiss company for the manufacturing and commercialization of Huperzine-A, used to treat Alzheimer's disease.

ONGC is among the top losers on Nifty. Speaking to CNBC-TV18 , the management said that there is no communication from the government on the subsidy front. The Q4 burden is likely to be similar to last quarter despite reforms. There is no clarity on timing for gas price hike yet. However, the FY14 production target is seen higher at 28.6 million tonne.

eClerx rallies as the board approves buy-back of shares up to 10 percent. Promoters hold 53.26 percent stake in the company.

Gati is up 4 percent as the company plans merger of 5 wholly owned subsidiaries with the parent company. The management says the amalgamation is expected to enable better financial capabilities and result in an enhanced shareholder value.

Bilcare is under pressure, down 5 percent as United Bank initiated legal action on the company. Speaking to CNBC-TV18, the management said that Bilcare management has not provided a definite plan to service the loans and they have collateral to protect the entire loan

NSE will shift 51 stocks to the trade-to- trade segment from April 12. These stocks include names like A2Z, Bartronics, Triveni Engineering, Uttam Sugar. Trading in these stocks will now take place in a price band of 5 percent. Most of these counters are under significant pressure in today's trade.

The market seemed to have perked up a bit. The Sensex was up 81.92 points at 18308.40 and the Nifty added 22.45 points points to be at 5517.95. Midcaps were still reeling under pressure while technology stocks continued to hold gains since morning.

Wipro (up 2.4 percent), Infosys (up 1.5 percent), TCS (up 1.4 percent) were major gainers in the Sensex.

Gati surged 3.4 percent as the company plans to merge five wholly owned subsidiaries with the parent company. The management says the amalgamation is expected to enable better financial capabilities and result in an enhanced shareholder value.

Meanwhile, investors were selling  auto stocks after domestic passenger car sales slumped 23 percent year-on-year to 1.8 lakh units in March, Society of Indian Automobile Manufacturers said on Wednesday. For the full year (FY13), car sales slipped 7 percent, first such decline in a decade.

Other laggards of the day included Sun Pharma, Strelite Industries, Jindal Steel and Hindalco.

Pressure was building up on Bilcare (down 5 percent) as United Bank initiated legal action on the company. Speaking to CNBC-TV18, the management said that Bilcare management has not provided a definite plan to service the loans and it has collateral to protect the entire loan.

It was a quiet session for the market in late morning trade. Traders will be closely monitoring the opening of European markets. The selling pressure intensifies after the opening and this pattern has been observed in the last few trading sessions.

The Sensex is up 30 points at 18256 and the Nifty is up 10 points at 5505.

HDFC, Lupin, Axis Bank, TCS and Kotak Mahindra Bank are top gainers on the Nifty.

Hindalco, ITC, Jindal Steel, ONGC and Sesa Goa are top losers.

Auto stocks are trading weak after domestic passenger car sales slumped 23 percent year-on-year to 1.8 lakh units in March, Society of Indian Automobile Manufacturers said on Wednesday. For the full year (FY13), car sales slipped 7 percent, first such decline in a decade.

NSE will shift 51 stocks to T2T segment from April 12. Companies like A2Z, Bartronics, Triveni Engineering , Uttam Sugar are shifted. The trading in these stocks will take place in a price band of 5 percent.

Jindal Stainless is up on reports the company has entered into a strategic agreement with Korean steelmaker Posco to help it stabilise production of alloy used in cars and home appliances.

The Department of Disinvestment (DoD) is planning to launch this month or early May the 9.33 per cent stake sale in MMTC, which could fetch around Rs 300 crore to the exchequer suggests reports. The stock is up 2 percent.

ONGC has signed a Memorandum of Understanding (MoU) with KK Birla Group company, Chambal Fertilisers and Chemicals for setting up a fertiliser unit in Unakoti district, suggests reports.

The market had become flat amid volatile trading session in the initial trading hour of the day. The Sensex was up 15.74 points at 18242.22 while the Nifty gained 1.80 points to 5496.90.

Big movers in the Sensex were HDFC, Wipro, TCS, Bharti Airtel and Cipla.

Tata Steel's Jan-March total steel sales reported 29 percent y-o-y growth. Also FY13 total sales were up 13 percent y-o-y to 7.48 million tonne. News reports suggest Tata Steel is considering selling some of its UK assets to cut debt. The stock was up half a percent.

NTPC-Coal India remain to be in focus as reports say NTPC may chose to move out of the price pooling mechanism for import of coal being run by CIL.

Diageos open offer for 26 percent stake in United Spirits has begun. The open offer at Rs 1440 /share is at a 24 percent discount to its current market price. Kingfisher Airlines is also excited as the ailing airline is going to meet the Directorate General of Civil Aviation (DGCA) later in the day to discuss its revival plans.

Educomp was up 1.2 percent as the company has sold its entire stake in JV to partner Pearson. Educomp exited Indiacan and sold its entire 50 percent stake to Pearson.

Meanwhile, losers in the Sensex were ONGC, Jindal Steel, ITC, Maruti Suzuki and M&M.

The market opens on a steady note ahead of trade balance data today, which will picture the annual current account deficit numbers for FY13. Finance Minister is confident that fiscal deficit will be lower than 5.2 percent.

The Nifty is trading above 5500 mark after hitting a fresh seven month low in trade yesterday. The 200 Day Moving Average is pegged at 5645 and it seems a long journey for the index to claw back above 200 DMA as of now.

The Sensex is up 92 points at 18319 and the Nifty up 24 points at 5519. Live Quotes

HDFC, TCS, Bharti Airtel, Lupin and Infosys are top gainers on the Nifty.

UltraTech Cement, Maruti Suzuki, Grasim, ONGC and Ranbaxy Labs are top losers.

Udayan Mukherjee, managing editor at CNBC-TV18 is wary of the Indian market touching new lows despite US and Japanese markets hitting record highs. He feels our market can drift to much lower levels if the global scenario also worsens in days to come.

Technical analyst, Sudarshan Sukhani recommends traders to go short with a stop loss above 5600. He is bearish on the market for some time now and has revised his target on the Nifty to as low as 5200.

However, Credit Suisse is bold enough to put a Sensex target of 20000. The brokerage house is upbeat about domestic market prospects and said the Sensex can still cross the 20,000-level in the "not too distant future".