Nifty eyes 4900 on strong service sector growth in May

The 50-share NSE Nifty rose nearly 1% and was inching towards the 4900 level after India's services sector grew at its fastest pace in three months during May. Banks, capital goods and technology stocks extended gains in afternoon trade.

The BSE benchmark gained 120.32 points at 16,108.72 and the NSE benchmark was up 43 points at 4,891.10.

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HSBC's services purchasing managers' index, compiled by Markit, went up almost two points to 54.7 in May from 52.8 in the previous month. It has posted an above-50 growth reading since November. (Above 50 reflects expansion while below 50 represents contraction.)

The index measuring business expectations jumped to a 15-month high of 76.7 last month from 73.8 in April, more than 14 points above its March level. HSBC's composite purchasing managers' index rose to 55.3 in May from 53.8 in April.

Country's largest lender State Bank of India rallied over 2.5% while its rivals ICICI Bank and HDFC Bank gained over 1%.

Engineering and construction major by sales Larsen & Toubro jumped over 2% and state-owned capital goods major BHEL was up 1.8%.

Index heavyweight Reliance Industries moved up 1.2%. Country's largest software services exporters TCS, Infosys and Wipro were up around 1%.

Reliance Infrastructure topped the buying list among Nifty 50, rising 3.5%.

Shares of Hindalco and NTPC climbed 2-2.5% whereas Tata Motors, ITC, Bharti, HUL and DLF went down 0.5-1.5%.

On the global front, European markets opened higher - France's CAC and Germany's DAX were up 0.7% and 0.4%, respectively

(With inputs from Reuters)