Firm global markets and expectations of a rate cut from the central bank triggered some strong buying on the major Indian bourses and lifted the key indices to a positive close on Thursday.
The Sensex opened with a positive gap of nearly 80 points at 17,276.87 - it remained its low for the day - and rose to 17,395.15 intra-day and finally ended at 17,332.62, netting a gain of 133.22 points or 0.77%.
The Nifty index of the National Stock Exchange closed at 5276.85, recording a gain of 50 points or 0.96%. The index touched a high of 5290.60 during the day.
According to the data released by the government on Thursday, industrial production rose by a smaller-than-expected 4.1% in February 2012. The government revised downward the industrial production growth for January 2012 to 1.14%, citing wrong sugar output data. Industrial production growth for January was earlier reported as 6.8%.
The data showed that manufacturing output, which has a 75.5% weight in the index of industrial production, rose 4% from a year earlier in February. In January, it saw a revised 1.4% surge in January, as compared to a rise of 8.5% reported earlier. Electricity production rose 8% from a year earlier, while capital goods output saw a growth of 10.6%.
The Reserve Bank of India is slated to come out with its monetary policy review next Tuesday, 17 April 2012.
Bank stocks had a good outing on Thursday with investors indulging in some brisk buying at several counters amid expectations of a rate cut. Metal, FMCG and automobile stocks too were in demand. Capital goods stocks surged thanks to the government data that revealed a more than 10% surge in capital goods output growth in February.
Power stocks pared some gains, but still ended mostly on the positive side. Oil, consumer durables and realty stocks closed on a mixed note, while information technology stocks were subdued amid cautious trades ahead of Infosys' results, due on Friday.
Jindal Steel ended stronger by nearly 5%. Sterlite Industries moved up almost 4% and Hindalco gained a little over 3%, while Tata Steel finished with a gain of 1.3%. Coal India, which was quite subdued most of the day, ended 0.4% up.
Among automobile majors, Maruti Suzuki gained 3.2%, Hero Motocorp surged 2.8% and Tata Motors ended higher by a little over 1%, while Bajaj Auto and Mahindra & Mahindra posted marginal gains.
Among banking sector heavyweights, State Bank of India closed nearly 3% up and ICICI Bank gained more than 1.5%, while HDFC Bank ended 0.8% up.
PSU power equipment maker BHEL notched up a gain of 2.35%. Larsen & Toubro gained about 0.75%. ITC advanced by 2.2%. Reliance Industries, Hindustan Unilever, GAIL India, Tata Power and Cipla also ended on a firm note.
Reliance Communications ended more than 4% up. ACC, Ranbaxy Laboratories, Axis Bank, Siemens, Sesa Goa, SAIL, IDFC, Kotak Bank, Ambuja Cements, Punjab National Bank and BPCL also closed with strong gains.
IT bellwether Infosys ended 1.8% down. Wipro and Tata Consultancy Services lost 1.2% and 0.8%, respectively. ONGC, DLF and Sun Pharmaceuticals were the other losers in the Sensex. NTPC edged down marginally.
Nifty stocks Cairn India, Dr Reddy's Laboratories and Reliance Power closed notably lower. Power Grid Corporation, which moved in a tight band, closed with a marginal loss.
Midcap and smallcap stocks had a good day. While the Midcap index surged 0.85%, the Smallcap barometer closed higher by a little over 1%.
Max India shares jumped following an announcement from the company that Japan's Mitsui Sumitomo Insurance Company is set to acquire 26% stake in Max New York Life Insurance.
Neyveli Lignite Corporation surged 3.87% on reports the union cabinet has approved the state-run company's proposal to set up 1,980 megawatt power project in Uttar Pradesh.
Siemens, Ashok Leyland, BASF and Strides Arco Lab also moved higher on stock specific stories.
The market breadth was fairly strong. Out of 2947 stocks traded on BSE, 1712 stocks moved up. 1100 stocks declined and 135 stocks ended flat.