Sensex ends up 146 points on telecom, OMCs rally

Key equity benchmarks continued to pile on gains, this time on the back on rally in oil marketing stocks after talks of a diesel prices hike.

The Sensex closed Thursday's session up 146.40 points at 19964.03, while the Nifty too had a decent outing ending up 37.35 points at 6039.20.

State-run oil marketing companies can now raise diesel prices in line with increases in global crude oil prices, Oil Minister Veerappa Moily said on Thursday, a move that could help the government reduce its vast subsidy bill.

Shares in oil marketing companies rose while bond yields fell after Moily's announcement.

Hindustan Petroleum Corp shares surged 5.2 percent while Oil and Natural Gas Corp gained 4.3 percent.

The 10-year yield fell as much 3 basis points to 7.85 percent.

The rupee rose to 54.47/4950 to the dollar from around 54.63/64 previously.

Telecom stocks also rallied after the Cabinet decided to slash CDMA spectrum price by 50 percent. hart Airtel was the top gainer on Sensex, rising 3.07 percent. Reliance Comm rose 3.27 percent, and Tata Comm rose above 1 percent each. Bharti Infratel and  Idea turned flat after a short rally.

Although no directive has come from the government on diesel price hike, stocks in the oil & gas shot up after petroleum ministry authorised oil marketing companies (OMC) to make fuel price corrections from time to time. The OMCs are expected to make a price-hike announcement tonight. It also allowed raising LPG subsidy cap to 9 cylinders from 6 cylinders earlier. The Finance Minister made it clear that will be no change in governement's subsidy plan.

While refinery major HPCL rose 8.5 percent, BPCL was up 5.7 percent, Oil India rallied 4.06 percent. Reliance, IOC and ONGC rallied 2.86 percent, 7.4 percent and 4.08 percent, respectively.

At 14.30 hrs IST, the Sensex was up 179.22 points or 0.90% at 19996.85, and the Nifty up 46.55 points or 0.78% at 6048.40.

Telecom stocks also rallied after the Cabinet decided to slash CDMA spectrum price by 50 percent. Bhart Airtel was the top gainer on Sensex, rising 3.07 percent. Reliance Comm rose 3.27 percent, and Tata Comm rose above 1 percent each. Bharti Infratel and  Idea turned flat after a short rally.

Midcap segment picked up momentum following key indices. Purvankara, was up 4 percent each, EIH gained 5.08 percent. Essar Oil, Unitech and Allahabad Bank were up above 3 percent.

The Sensex gains around 0.5 percent, while the Nifty is up around 0.4 percent. Technology shares gain after HCL Technologies Ltd beat estimates with a 68.4 percent jump in quarterly profit.

As of 11:56 a.m., HCL Technologies is up 4.8 percent after hitting its highest since February 2000. Infosys Ltd is 1.23 percent while Tata Consultancy Services Ltd is higher 1.7 percent.

Wipro gains 3.4 percent after UBS raised its ratings to "buy" from "sell", saying revenue momentum will start picking up from the October-December quarter.

HCL Tech remains the big mover in a lacklustre market, rising 5.6 percent post solid second quarter performance. Besides, oil marketing companies were up on hopes of a deisel price hike. A decision on it is expected at the Cabinet meet later in the day.

HPCL was up 5.90 percent, BPCL spiked 1.58 percent and IOC rose 2.33 percent in anticipation of a positive outcome from the Cabinet meet. Reliance, ONGC, Cairn India, and Oil India were trading with gains of 0.73 percent, 0.38 percent, 0.03 percent and 1.03 percent respectively.

At 10.32 AM, the Sensex moved up 32.34 points at 19849.97, and the Nifty was trading 8.85 points up at 6010.70.

Besides Reliance, stocks that were lending support to the BSE benchmark were Infosys, TCS, SBI and Tata Motors. ITC, HDFC, HDFC Banbk and ICICI Bank were weighing on the Sensex.

Index heavyweight Hindustan Lever was trading at Rs 500.60 up 0.28% from its previous close of Rs 499.20 and Cigarette major ITC was trading at Rs 283.00 down 0.23% from its previous close of Rs 283.65.

Key indices were up slightly in early trade as buyers are now treading cautiously after the run-up since the start of this calendar. The Sensex was at 19832, up 14 points and the Nifty was up 7 points to 6009.

HCL Tech shares were up around 4 percent to Rs 704 after the company reported better than expected numbers for the December quarter, beating expectations on revenues and net profit.

HCL Tech's strong numbers boosted sentiment for peers like Wipro and Tech Mahindra, which are yet to report their earnings. Both Wipro and Tech Mahindra were up over 2 percent. Auto and IT shares were among the key gainers in early trade, while FMCG and metal were among the major laggards.

Hopes of a 50 basis point cut have receded somewhat after RBI Governor D Subba Rao said that inflation was still high and controlling it would the central bank's priority.

Many fund managers feel the big upmove in the market is behind and that gains would be stock-specific here on. DLF shares were up around 3 percent on a report in The Economic Times that the company was selling its wind energy arm for Rs 900 crore, as it tries to pare debt.