Short covering in heavyweight stocks on the expiry day of derivative contracts and better-than-expected results from a few blue-chip companies helped lift the Indian market sharply higher on Thursday.
With positive sentiment in overseas markets buoying sentiment to a notable extent, the benchmark 30-share Sensex closed near the day's high at 18,045, up 197 points or 1.1 percent from its previous close. Likewise, strong buying in oil/gas, metal and auto stocks lifted the broader Nifty index up by 63 points or 1.19 percent to 5,412.
The BSE mid-cap and small-cap indexes posted relatively modest gains, with their respective indexes edging up 0.14 percent and 0.46 percent, respectively.
Tata Steel advanced 2 percent after reporting turnaround FY11 results, helped by a one-time gain. Jindal Steel, Hindalco and Sterlite rose by 0.8-3.5 percent as metal prices climbed on the London Metal Exchange overnight.
Battered Reliance Industries rallied nearly 3 percent on a report in the Economic Times that the government may direct Reliance to supply gas at regulated rates only to a few top-priority consumers. Such a move implies that the company will get a substantial freedom when it boosts output from its KG-D6 fields.
State-run ONGC soared 4.4 percent and GAIL advanced 2.8 percent ahead of a meeting of a ministerial panel early next month to consider raising diesel prices. Oil explorer Cairn India rose 1.4 percent after it reported a 10-fold rise in quarterly net profit.
In the auto pack, Tata Motors gained 2.5 percent ahead of its quarterly earnings after the market close. Hero Honda Motors jumped 4 percent and Maruti Suzuki added 1.3 percent. Property developer DLF rose 3 percent, FMCG player Hindustan Unilever gained 2.2 percent and private sector lender ICICI Bank ended up 1.6 percent.
Coal India climbed 3.2 percent on posting a 13 percent rise in its FY11 net profit. Mastek pared early gains to end flat despite the company signing a multi-year strategic framework agreement with the U.K. financial services regulator.
Suven Life Sciences hit the 5 percent upper circuit limit after the company said it received four product patents from different countries for its new chemical entities which could be used in treating disorders associated with Neurodegenerative diseases. JK Lakshmi Cement rose 3.2 percent despite reporting a 54 percent fall in quarterly net profit.
Infosys lost half a percent on going ex-dividend. ITC shed 1.1 percent, HDFC eased 0.3 percent and Bharti Airtel ended down 0.2 percent. Power Grid Corporation of India fell 1.39 percent on reports that it will invest Rs 18500 crore in FY12 to augment the nation's power transmission capacity.
Meanwhile, India's annual food inflation for the week ended May 14 rose to 8.55 percent from 7.47 percent a week before, government data released today showed, adding pressure on the central bank to tighten monetary policy more aggressively to tackle rampant inflation that is threatening prospects for economic growth.
The fuel and power inflation, however, remained unchanged at the previous week's level of 12.11 percent, the statement from the Ministry of Commerce said.
On the global front, the other Asian markets closed mostly higher Thursday, with gains ranging between 0.2 percent and 2.8 percent, as gains on Wall Street overnight after three straight days of declines, corporate announcements in Japan and a rebound in commodities helped investors brush aside concerns about eurozone credit market and global growth.
However, European stocks erased early gains as commodities dropped in late Singapore trading and caution prevailed ahead of U.S. GDP data which could shed more light on the pace of recovery in the world's largest economy.
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