Sensex spurts on global rally...ITC up, L&T down

The Indian equity indices ended higher on Monday, starting off the holiday-shortened week with smart gains, as investors around the world welcomed reported progress talks between the eurozone nations on ways to tackle the economically crippling debt crisis.Encouraging data from Japan and China also helped lift the mood ahead of Tuesday's RBI monetary policy.

However, the main indices did surrender some of the session's gains after the release of downbeat Composite PMI data in Europe. European equity indices pared their gains after data showed that the preliminary composite purchasing managers index (PMI) for the eurozone fell to 47.2 in October, its lowest reading since July 2009. Economists had forecast a decline to 48.8. A reading of less than 50 signals contraction while a figure of more than 50 implies expansion.



As far as the day's results are concerned, ITC's earnings were good, while that of Union Bank left investors sour.

Finally, the BSE Sensex ended at 16,939, up 153 points. It had earlier touched a day's high of 17,105 and a day's low of 16,898. It opened at 17,011.

The NSE Nifty closed at 5,098, up 48 points.

Earlier, the Sensex reclaimed the 17,000 mark and the Nifty surpassed the 5,100 milestone on the back of encouraging global cues.

The market breadth narrowed as the Small-Cap and Mid-Cap indices also erased most of the session's gains and closed in the red.

Globally, Asian markets galloped today, tracking a firm session for US and European markets on Friday amid growing hopes of a decisive plan to check the spread of the region's sovereign debt crisis.

European leaders are said to be making progress towards a wide-ranging plan to deal with the eurozone credit crisis. An announcement on the eurozone debt crisis is likely on Wednesday.

Shares of L&T slid after the company's Q2 order intake missed market expectations and the infrastructure titan scaled down its order inflow guidance for FY12 to a growth of just 5% from 15% earlier.

Union Bank was a big loser after its Q2 earnings disappointed investors. The stock ended lower by nearly 11%. Other public sector banks, including SBI also fell post Union Bank's results. Grasim, Axis Bank and Idea were the stocks that gained post their Q2 results last week.

Shares of RCOM and Sun TV Network fell after a special CBI court in New Delhi last week framed charges against all the 17 accused in the 2G scam, including the three officials belonging to the ADAG and those linked to the Sun TV group. The company today moved the Delhi High Court for quashing of charges framed against it by a CBI court in 2G spectrum case.

On the other hand, shares of Jet Airways, Kingfisher Airlines and Spicejet have advanced on a report that the Government is contemplating allowing overseas airlines to pick up stake in the domestic carriers.

"For the Indian markets, the focus will be on Tuesday’s RBI policy review. A sticky inflation, a sliding rupee, poor Central Govt finances and talk of another round of monetary easing overseas will make it tough for the RBI not to lift rates. F&O expiry and corporate earnings could result in extra volatility tomorrow.

Markets will be closed on Wednesday and Thursday before resuming on Friday. Indian markets would get their first chance to react to the Eurozone announcement that is expected on Wednesday," says Amar Ambani, Head of Research, IIFL - India Private Clients.