The BSE Sensex gained over 0.5% Tuesday on the back of modest gains in Asian stocks and the firming trend in the rupee. At 09.20 a.m., it traded 86 points higher at 16,074, while the broader Nifty index advanced 27 points at 4,875.
Analysts attributed the gains to short covering because the markets have fallen sharply over the last few days.
"This is a bounce or a pullback and the best case for the Nifty index is 4,900-4,930. The rally is unlikely to last beyond this as markets are still under short term averages," independent analyst Sarvendra Srivastava said.
The rupee gained 26 paise to 55.39 against the dollar helping sentiments.
Japan's Nikkei index (0.42%), the Hang Seng index (0.61%) in Hong Kong, and South Korea's Kospi (0.83%) traded higher. Asian stocks gained despite disappointing US factory orders data, which indicated that companies placed fewer orders to American factories for the second straight month. Falling bond yields in Spain and Italy boosted confidence that Europe can avoid a messy breakup of its currency union.
Banks (1.12%) and capital goods (1%) stocks led the gains on the BSE today. On the Nifty index, 40 of the 50 stocks traded higher. Infra and cement major Jaiprakash Associates (2.2%) was the top gainer for a second straight day, followed by Reliance Infra (2%). Oil and gas major Cairn India (1.9%) gained on the back of rising crude prices.
Drug maker Dr Reddy's (-0.63%) was the top loser, followed by FMCG major ITC (-0.56%). Realty major DLF (-0.56%) also saw some selling pressure.
The market breadth was strong with 85% stocks rising on the broader BSE 500 index.
(With inputs from AP)
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