Market update: Sensex gains 116 points; Tata Steel slumps 4.5 per cent

Gains in metals and select technology and pharma stocks have helped the frontline Indian indexes to recover all their losses of yesterday. Other Asian markets are mixed in early afternoon trading, despite the gains in broader US indexes yesterday.

Sensex opened at 13601 and rallied to a high of 13745. The index is trading higher by 136 points at 13745 at 11.10 AM IST.

Nifty opened at 3990 and saw a high of 4030. The index is now trading higher by 44 points at 4029.

HCL Tech has surged following better than expected quarterly numbers announced after market close yesterday. It is the best performing Nifty stock with gains of 6 per cent.

Metal stocks have recovered after yesterday's correction. Sterlite Industries has gained well over 4 per cent while Hindalco is trading 2.5 per cent higher. SAIL has added more than 1.5 per cent.

Select pharma stocks are also doing well, led by Sun Pharma which has added 3.5 per cent. Ranbaxy has gained nearly 2 per cent.

Reliance Energy is continuing the rally and has added nearly 2 per cent.

Among other major gainers, PNB, Zee Entertainment and Dabur have all gained around 2 per cent each.

Tata Steel has tumbled nearly 4.5 per cent on fears of equity dilution. The company had announced plans to raise around $4 billion through a combination of equity shares and convertible warrants on a rights basis, besides other instruments, to re-finance the bridge loans taken earlier to to finance the Corus acquisition.

Infosys has lost over 0.5 per cent.

Dr. Reddy's and Bajaj Auto are trading with marginal losses.

Mid-caps and small caps have also gained ground in morning trading. The NSE mid-cap index is now trading with gains of nearly 1.05 per cent. BSE mid-cap index has added over a per cent and the BSE small-cap index is trading nearly 0.95 per cent higher.

TV Today has rallied over 8 per cent following the announcement of an open offer for 20 per cent of the company by Reliance Capital. The offer price though is much lower than the current market price of Rs161.

Precision Wire, GTL, Kopran, Inox Leisure, Hanung Toys, Sterling Biotech, Rajvir and Honda Power are the major gainers among mid-caps and small caps.

Dish TV, the de-merged DTH business of Zee Entertainment, got listed today. The stock is now trading at Rs109.5 after opening at Rs114 per share.

Sarla Poly, Kajaria Ceramics, Cambridge Technology, Oil Country Tubular, Compulink Systems, Alfa Laval and Heritage Foods are the other major losers among mid-caps and small-caps.

Thomas White Global Research, part of the Thomas White International Group, publishes capital market research for global institutions and investment banks, and is headed by Thomas White, a former managing director of Morgan Stanley Asset Management.

*Disclaimer: Thomas White International may have recommended some of the stocks specifically mentioned in this report to our clients. Lord Asset Management Trust, our mutual fund management associate, and our asset management division may also have positions in some of the stocks specifically mentioned in this report. As a policy, employees of Thomas White International are not allowed to invest or trade in common stocks and common stock derivatives. This report is only for the purpose of information and is not an investment advice. Readers are advised to consult a certified financial advisor before taking any investment decisions. While efforts have been made to ensure the accuracy of the information provided in the content, the author or publisher shall not be held responsible for any loss caused to any person whatsoever.