Sensex discounts high inflation, rises 242 pts on IT support

Tremendous gains in the IT stocks helped the Indian markets to close the trade on a buoyant note, snapping three-day of losses. The Sensex rose 242 points and the Nifty gained 72 points

Major headlines

August inflation at 9.78% versus 9.22% in July

GTL out of F&O from September 16

SREI Infrastructure takes beating on alleged promoter fraud

IT stocks rise as rupee falls to nearly 2-year low

Reliance Capital receives approval from IRDA for Nippon deal



Indian indices

The Indian markets registered smart gains today with major support coming in from technology, metal, banking and auto stocks. Buying interest in heavyweights like JP Associates, Infosys, Wipro, HDFC Bank, RIL, TCS and ICICI Bank lifted the markets. Gains in European stocks further provided support. Rise in inflation in the month of August was discounted by the market. The markets closed the session on a strong note, snapping three-day of losses.

Sensex movements: The Sensex began 55 points higher at 16523 and suddenly turned negative. Weakness in the Asian stocks and some selling pressure dragged the index to day’s low of 16387 in the mid-morning session. Later, the index started to move higher tracking positive European cues and strong buying interest in technology stocks to hit the day’s high of 16754. The Sensex stood 242 points higher at 16710 and the Nifty rose 72 points to close at 5013.

Market sentiment:

The market breadth was in favour of advances. Of the 2912 stocks traded on the BSE, 1528 (52.47%) rose, 1268 (43.54%) fell and 116 (3.98%) traded unchanged.

Viewing volumes

Indian shipbuilder Pipavav Shipyard was traded the most, with over 0.51 crore shares changing hands on the BSE. a Jaypee Group firm - Jaiprakash Associates (0.36 crore shares), India's second largest developer - Unitech (0.27 crore shares), industrial finance company - IFCI (0.24 crore shares) and an Indian infrastructure development company - Jaypee Infratech (0.18 crore shares).

Sectoral & stock screening

All the sectors closed higher BSE CG down by 0.36%. BSE IT stood the best performer, up by 4.27% followed by BSE TECk up by 2.92% and BSE Metal advanced by 1.90%. Remaining gainers stood in the range of 0.12-1.46%.

In 'A' group stocks, top performers - Jaypee Infratech up by 12.15%, Jaiprakash Associates surged by 6.39% and Educomp Solutions rose by 5.96%. Major losers - Pantaloon Retail (India) down by 7.71%, Opto Circuits (India) fell by 3.05% and Jet Airways declined by 2.62%.

Global indices

The European shares bounced back on Wednesday after European Commission President Jose Manuel Barroso said the commission will soon present options for the introduction of common euro bonds, which some believe can help resolve the debt crisis.

The Asian markets closed mixed on Wednesday as persistent worries about the European debt crisis raised fears of more losses ahead.

The US stock index futures pointed to a lower open on Wall Street on Wednesday.

Market Outlook: Data releases in the US on Wednesday - Producer Price Index, Retail Sales and Business Inventories