Reliance and technology stocks lead market rally

Markets opened the day on a positive note but traders were wary after the volatility seen during the last two days. Though the positive cues from a strong closing by the US markets yesterday and the substantial decline in crude prices helped the indices in early trades, markets were held back by the uncertainty over the oil subsidy sharing formula expected later in the day.

After trading within a range till noon, the indices dipped and went into the negative for a short period. However, strong buying in Reliance helped the markets to recover soon after and the indices gained strength as more and more stocks joined the rally. Reports that the oil subsidy sharing formula finalised by the government is more or less in line with market expectations helped all the oil stocks.

The upsurge in the indices during the last one hour was very fast as stocks like Infosys and Tata Motors gained more strength. The recovery in ONGC from its earlier lows also helped the indices.

Sensex closed at 7272, with a gain of 84 points, and the Nifty at 2213, a gain of 27 points. Nifty July futures discount to the spot index narrowed to 5 points from yesterday's 14 points.

VSNL, Reliance Industries and Infosys were among the major gainers among Nifty stocks while HDFC Bank, Tata Chemicals and ICICI Bank were the major losers.

Strong earnings from frontline companies and sharp decline in crude prices helped US markets to close on a positive note yesterday. The Dow gained well over half a per cent while S&P 500 gained over a quarter of a per cent. NASDAQ closed with gains of close to half a per cent.