Reliance and IT stocks lead strong market rally

With heavyweights leading from the front, the indices did not need many positive global indicators to post the strongest intra-day rally in almost three months. What started off as a modest uptrend gathered strength by early afternoon as most frontline stocks surged.

Reliance group stocks were the strongest gainers after the latest round of reports that a settlement between the brothers was very near. Even though the markets have heard the same story any number of times in the recent past, it never fails to excite traders. Flagship Reliance Industries closed with gains of over 4 per cent.

Frontline IT stocks also surged and the IT index closed with over 3 per cent gains. Wipro led the pack with a 3 per cent gain followed by Infosys with over 2 per cent. TCS and Satyam also managed to close with strong gains of around 2 per cent each.

Sensex closed at 6749, up 93 points and the Nifty at 2094, up 30 points. Nifty June futures discount to the spot narrowed to 17 points from yesterday's 28 points.

Among Nifty stocks, VSNL, Zee Tele and Reliance Industries were the major percentage gainers while Grasim, Tata Tea and Gujarat Ambuja Cements were the major losers.

US markets were flat yesterday as traders await the May employment data due for release today. Traders did not give much importance to weekly unemployment claims, which rose during the previous week. Labour cost in the first quarter rose over 3 per cent raising fears of inflation. The cooling off in oil prices after the previous day's dramatic surge also helped the markets to remain steady. The NASDAQ closed with gains of close to half a per cent while Dow closed almost flat.