Sensex soars despite sour IIP...Infy lifts IT pack

A highly eventful day ended with splendid gains amid all round buying in scrips across the board. The rally was led by IT stocks after Infosys announced strong Q2 earnings on the back of comprehensive margin improvement and also came out with better than expected guidance. The rupee guidance of the company was 6-7% higher than street estimates.

Finally, the BSE Sensex ended at 16,958, up 422 points. It had earlier touched a day's high of 16,987 and a day's low of 16,608. It opened at 16,660. The NSE Nifty closed at 5,099, up 125 points.



The BSE Sensex and the NSE Nifty closed near the day's highs. The Nifty surpassed the 5100 mark but ended just 1 point shy of it. The Sensex came very close to hitting the 17,000 milestone.

Shares of Infosys rallied after the company announced consolidated net profit of Rs. 19.06bn as compared to Rs. 17.22bn in the previous quarter. The company has posted consolidated net sales at Rs. 80.99bn as compared to Rs. 74.85bn in the previous quarter.

Other IT shares also advanced on expectations that they too will declare strong Q2 results in the days to come.

Among the other major gainer was the BSE Teck index, up 3.8%, while the BSE Banking index was up 3.3%. The BSE Realty index was up 3% and the BSE Capital Goods index was up 2.5%. The Mid-Cap and the Small-Cap index added 1.4% and 1.1% respectively.

"Sentiment received a slight jolt in the afternoon trade after government data showed that India's industrial production grew at a lower-than-expected pace in August, adding pressure on the central bank to pause its aggressive monetary tightening when it meets later this month.

IIP grew by a modest 4.1% in August versus 4.5% in the same period a year earlier. The reading was lower than the consensus estimate of 4.7-4.8%.

But, the Indian market rebounded from intraday lows hit in the afternoon trade, as investors welcomed a rebound in the European markets and a big rally in the Chinese market," says Amar Ambani, Head of Research, IIFL - India Private Clients.

Technically, the NSE Nifty ended above the 50DMA. In addition, the index also managed to close the declining gap, indicating strength in the current rally.