Strong close: Sensex surges 207pts, Nifty ends at 5908

It was a steady session as afternoon trade gathered momentum. Led by strength in banks, the market closed the day with handsome gains. The Sensex ended the day gaining 207.89 points at 19570.44 while the Nifty added 57.75 points to end at 5908.95.

Banking stocks turned out to be star of the day as investors are expecting a rate cut by Reserve Bank of India in its monetary policy on March 19. Some of the banking stocks, which were marred in the money laundering controversy , also recovered during the day. Big gainers from the sector were SBI (3.5 percent), HDFC Bank (up 2.3 percent) and ICICI Bank (up 2.3 percent).

Realty stocks too saw a strong upmove in today's trade. Unitech was up 6.1 percent, Prestige Estate gained 7.9 percent, HDIL added 2.7 percent while DLF was up 1.5 percent.

Reliance Communication was up 5.6% on media reports that Batelco is in talks to buy controlling stake in Reliance Globalcom. Bahrain Telecommunication Company (Batelco) is discussing a deal to buy controlling stake in Reliance Globalcom, the enterprise business unit of Anil Ambani's Reliance Communications. Reliance Industries closed above the Rs 850-mark at Rs 860.65, up 2% on the BSE.

Other big gainers on the Sensex included Maruti Suzuki (up 3.4 percent) and Tata Power (up 2.9 percent).

Meanwhile, major losers on the Sensex were Gail, Bajaj Auto, Sun Pharma, Bharti Airtel and Hero MotoCorp.

Shares of Kennametal India, which manufactures standard toolkit for machining turbine blades, crashed 9.1 percent amid hefty volumes on Thursday after the company fixed lower offer price for its offer for sale (OFS).

Tomorrow's bets

All eyes will be on oil marketing companies as petrol price may be reduced by about Re 1 per litre while diesel price may be hiked by 40-50 paise a litre from March 15-16.

According to Amit Dalal of Tata Investment the market will remain rangebound for another quarter. "I don't see how this market can go on to a new high without the back of some other banks or the oil and gas sector getting revalued by another 20 percent, which is not going to happen," he said in an interview to CNBC-TV18.

Sudarshan Sukhani, s2analytics.com recommends to go long on Bank Nifty.

The market picked up steam in afternoon trade. The Sensex gained 183.06 points at 19545.61 while the Nifty was at 5904, up 53.55 points, led by strength in banks.

Investors are buying banking stocks as the street is expecting a rate cut in Reserve Bank of India's monetary policy on March 19. Bonds were also in focus. The 10-year prices rose after  core inflation data  was announced.

Top gainer on the Sensex was SBI (3.2 percent) while HUL, HDFC, ICICI Bank and Maruti Suzuki added around 2 percent each.

Maruti gained investors' confidence as the company board is likely to meet tomorrow to plan out the expenditure for the new fiscal.

On the downside were Bajaj Auto, Gail, Tata Motors, Sun Pharma and Bharti Airtel.

The BSE Sensex is up 0.83 percent while the 50-share Nifty gains 0.82 percent, as February core inflation at 3.8 percent gives enough headroom for rate cut by the RBI in its policy review on March 19, dealers say.

India's core wholesale price inflation was estimated at 3.8 percent in February from a year earlier, according to a Reuters snap survey of three analysts and traders on Thursday, below expectations of an around 4.2 percent rise.

The government data released on Thursday gives the Reserve Bank of India room to ease monetary policy when it meets next week, the prime minister's economic adviser, C. Rangarajan, said on CNBC-TV18 television news channel.

Rate-sensitive stocks such as State Bank of India gain 2.8 percent while ICICI Bank is up 2.2 percent.

Key equity benchmarks recovered from day's low after the February WPI inflation data was announced.

The inflation rose to 6.84 percent in February from 6.62 percent in the previous month. A CNBC-TV18 poll estimated it to be at 6.5 percent compared to 6.6 percent in January.

At 12.14 hrs IST, the Sensex was up 94.83 points at 19457.38 and the Nifty jumped 31.50 points at 5882.70. About 1010 shares have advanced, 1415 shares declined, and 1084 shares are unchanged.

Major losers were GAIL (2.37%), Bajaj Auto (1.81%), Tata Motors (1.2%), Bharti Airtel (1.13%) and Jindal Steel (1.06%)

On the other hand, HUL was the top gainer rising 2.47% followed by   Maruti Suzuki (1.92%), SBI (1.68%), ICICI Bank (1.43%) and ONGC (1.18%).

The February WPI inflation data gives Reserve Bank of India (RBI) room to ease monetary policy when it meets next week, prime minister's economic adviser, C Rangarajan, said in an interview to CNBC-TV18. "As of now, the numbers provide some comfort for the authorities to move in the direction of easing."

The Bank Nifty was up close to 2% on back of short covering.

The market was moved down by ICICI Bank, HDFC Bank and Axis Bank, which fell 1.50 percent, 1.91 percent and 2.39 percent respectively in early trade. These three have significant weightage on Nifty.

At 09.52 hrs IST, the Sensex is down 118.06 points or 0.61% at 19244.49, and the Nifty down 38.70 points or 0.66% at 5812.50.

Other losers on the indices are Bharti Airtel, GAIL, Tata Motors, HDFC Bank, Hindalco, GAIL and Bajaj Auto.

The bearish mood in market thawed a bit with benchmarks opening flat with respectable breadth. Hero MotoCorp and ICICI Bank were the top gainers (up around 1 percent each), pulling the BSE and NSE barometer to a stable zone. ONGC, however, was adding pressure by trading 1.52 percent down. Other banking stocks were trading marginally in the green after they got hammered yesterday after hopes of rate-cut dimmed. Index heavyweight Reliance was trading at Rs 846.00, up 0.25% from its previous close of Rs 843.85.

At 09.19 AM, the Sensex rose 34.01 points at 19396.56 and the Nifty gained 6.75 points at 5857.95. The midcap index was trading flat with a few stocks standing out in the trade. Indian Infotech shot up 14.8 percent and midcap realty stocks like Prestige Estate and Parsvnath were up around 5 percent and 3.7 percent, respectively.

The Indian rupee was trading flat in the opening trade at 54.36 per dollar against the yesterday's close of 54.30. The dollar index was at 82.80 level after climbing to the 83 mark. The euro slipped to sub 1.30 levels.

Meanwhile, The US equity markets closed marginally higher on the back of better-than-expected retail sales data while European markets finished mixed.

The Dow Jones industrial average gained 5.22 points, or 0.04 percent, to close at 14,455.28, another record closing high. The Standard & Poor's 500 Index advanced 2.04 points to 1,554.52 while the Nasdaq Composite Index rose 2.80 points to end at 3,245.12.