The BSE Sensex stayed above the key 16,000 mark Tuesday as stocks gained momentum on the Dalal Street. At noon, it traded 117 points or 0.73% higher at 16,105, while the broader Nifty index advanced 40 points at 4,888.
Asian stocks also extended gains supporting equities. The rupee, however, shed some gains and traded at 55.56 to the dollar. Falling crude prices and strength in the euro have led to the recovery in the currency.
Banking stocks (1.5%) extended gains for a second straight day on hopes that the Reserve Bank will cut rates to kick start the economy later this month. HDFC Bank, SBI and ICICI Bank together contributed nearly 50 index points to the Sensex. Public sector lender SBI (2.55%) was among the top Nifty gainers.
"The way to play the beta in the market is through banks... This sector represents a good trading bet especially before the RBI policy," Prashastha Seth, senior fund manager at IIFL Wealth said.
On the Nifty index, 37 of the 50 stocks traded in the green. Ambuja Cements (-2.2%) was the top loser, followed by realty major DLF (-1.5%) and Tata Motors (-1.2%). Reliance Infra (3%) and Grasim (2.6%) were the top gainers on the Nifty.
All other sectoral indices, barring realty stocks, traded in the green on the BSE. Capital goods (1.8%), metal (1.25), power (1.3%) and consumer durables (1%) bounced back.
The market breadth was strong, with 80% stocks rising on the broader BSE 500 index.
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