Sensex rallies after early weakness, ends 107 points up

In the currency market, the rupee recovered after early weakness and was quoting around 49.45 against the U.S. dollar, well off an early low of 49.66.

Metal stocks hogged the limelight past mid afternoon. Jindal Steel (6.5%), Hindalco (4.3%), Tata Steel (4.2%) and Sterlite Industries (3.2%) ended on a buoyant note.

Automobile stocks had a good outing on Wednesday on strong sales data from Maruti Suzuki, Mahindra & Mahindra and TVS Motor. Hero Motocorp ended 3.5% up. Mahindra & Mahindra, Maruti Suzuki and Tata Motors gained 2% - 2.35%, while Bajaj Auto, which was relatively subdued, closed with a gain of around 0.5%.

Reliance Industries spurted over 2% following the commencement of the company's buy-back programme, and despite retreating a bit in the final minutes, ended the day with a gain of 1.85%.

Tata Power ended more than 6% up. Larsen & Toubro notched up a gain of 2.7%. BHEL and Hindustan Unilever ended higher by 1.75% and 1.6% respectively, while HDFC Bank moved up by 1.2%. GAIL India, State Bank of India and DLF posted modest gains.

IDFC, SAIL, Reliance Infrastructure, Ambuja Cements, Cairn India, Punjab National Bank and Grasim Industries gained 2% - 4%. Sesa Goa, Kotak Bank, Reliance Communications and Axis Bank also ended with strong gains.

Coal India declined by 2.6%. ICICI Bank drifted down by around 1.5% on profit taking after recent strong gains. ONGC, HDFC and Bharti Airtel lost 1% - 1.3%, while ITC and NTPC ended lower by 0.85% and 0.6%, respectively. IT majors Infosys, Tata Consultancy Services and Wipro closed with modest losses.

BPCL, Power Grid Corporation, Ranbaxy Laboratories and Dr Reddy's Laboratories also ended weak.

Fortis Healthcare, Tata Global Beverages, Subex, Uco Bank and Suzlon Energy posted strong gains with impressive results and stock specific stories aiding their surge.

Indian Oil Corporation shares lost more than 5% amid worries about the implication of an interim court order on entry tax on crude oil brought into Mathura. PTC India, Blue Dart Express and Century Enka drifted lower on weak results.

The market breadth was strong on Wednesday. Out of 2961 stocks traded on BSE, 1868 stocks moved up. 980 stocks declined and 113 stocks ended flat.

According to the data released by the government on Wednesday, India's merchandise exports rose 6.7% to $25 billion in December, while imports during the same month surged 19.8% to 37.8 billion. As a result, the trade deficit for December stood at US$12.7 billion, as compared to US$8.06 billion in the corresponding month a year earlier.

Due to better performance in the previous months, the country's exports grew by 25.8% year-on-year to $217.6 billion in the April-December 2011-12. During the first nine months of the fiscal, imports also rose by 30.3% to $350.9 billion leaving a trade gap of $133.2 billion.

Oil imports during December surged 11.2% to US$10.27 billion, while non-oil imports were up 23.4% at US$27.47 billion.

Meanwhile, India's manufacturing sector activity jumped to an eight-month high in January as factories stepped up production on increased demand, data released by HSBC Holdings Plc and Markit Economics showed.

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The HSBC-Markit India manufacturing PMI rose to 57.5 in January from 54.2 in December. A reading over 50 indicates expansion while any reading below it implies contraction. India's manufacturing PMI has stayed above the 50 mark for nearly three years.

India's factory output sub-index jumped to 62.9 in January from 55.8 in December, the biggest month-on-month gain on record. Both the output and the new orders indexes rose to their highest level since May last year.