Markets have rallied further in early afternoon trades, despite sustained weakness in Asia and a weak opening by Europe. Most frontline stocks have gained further and both indices are now trading with gains of well over 1.5 per cent each.

Sensex is trading higher by 208 points at 10870 at 01.10 PM.

Nifty is trading higher by 51 points at 3189.

Powering the market rally are index heavyweights Reliance Industries and ONGC. Both stocks are now trading with gains of around 2 per cent each.

HDFC has rallied further and is now the biggest gainer among index stocks, trading more than 4.5 per cent higher. HDFC Bank has gained over 3 per cent.

Tata Steel is trading nearly 4 per cent higher on reports that Tata Sons would hike its stake by 10 per cent.

FMCG stocks continue to do well after a strong opening. HLL is up more than 4 per cent while ITC has added 3 per cent.

L&T has gained further and is now trading higher by almost 4 per cent. Suzlon has extended its run with another 2 per cent gain. Siemens has also gained 2 per cent while ABB has gained almost 1.5 per cent.

Among technology stocks, TCS has added nearly 2 per cent. Infosys, HCL Technologies and Satyam Computers are trading with gains of over a per cent each.

Grasim, Zee Tele, Dr. Reddy's and Tata Power are the other major gainers among index stocks.

Nalco continues to be the biggest loser among index stocks, trading more than a per cent lower. Gail India is also down more than a per cent.

Auto stocks Tata Motors and M&M remain weak. M&M is down more than a per cent while Tata Motors is down almost 0.5 per cent. Hero Honda is trading lower by nearly 0.5 per cent.

Tata Tea and Ranbaxy are the other losers

Mid-caps and small caps are holding on to their gains but the momentum seen in large caps is clearly missing in the smaller stocks. The mid-cap index is now trading with gains of around 0.70 per cent. Market breadth on the NSE is positive with 5 shares advancing for every 3 declining shares.

Repro India, Apollo Tyres, Tata Investment Corp, Hyderabad Industries, Hitech Gear, Bharat Forge and Tube Investments are among the major mid-cap gainers.

Hanil Era Textiles, Sanghi Industries, Indoco Remedies and Vaibhav Gems are the major mid-cap losers.