RIL helps Sensex gain 172 pts; Infosys up 3% ahead of Q3 nos

After a roller coaster ride, the market managed to gain strength in last hour of trade Wednesday with the Nifty scaling back above 7500 aided by index heavyweights. Positive European cues post recovery in oil prices also supported Indian equities. However, the broader markets underperformed benchmarks.

Equity benchmarks snapped two-day fall today. The 30-share BSE Sensex rallied 172.08 points to end at 24854.11 after showing more than 400 points recovery from day's low. The 50-share NSE Nifty hit an intraday low of 7425.80, before closing up 52.10 points at 7562.40.

Though short covering helped market rebound today, experts still expect 5-10 percent correction ahead of Union Budget.

The low IIP number too was a dampener and has added to nervousness today, believes Ajay Srivastava, Dimensions Consulting. According to him, the upcoming Budget could be more negative than anticipated because it is likely to bring in more taxes for us and does not expect any positive surprises from it.

Adrian Mowat of JP Morgan feels the Nifty is likely to retest lows of 6300 if China situation worsens.

The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices falling 0.5 percent and 1.8 percent, respectively. More than three shares declined for every share advancing on the Bombay Stock Exchange.

On the global front, European markets extended gains today despite continued wariness about low oil prices and China's economic slowdown. France's CAC, Germany's DAX and Britain's FTSE rose 1-1.5 percent (at 16 hours IST). Asian markets ended mixed with the Shanghai down 2.4 percent while Nikkei rising 2.9 percent. Brent crude jumped 2 percent to USD 31.5 a barrel and NYMEX crude gained 2 percent to USD 31 a barrel (at 16 hours IST).

Back home, Infosys topped buying list on the Sensex, up 3.14 percent ahead of third quarter earnings due on Thursday. A CNBC-TV18 poll expects muted growth in dollar revenue and a 2.9 percent decline in profit on sequential basis.

Reliance Industries touched 18-month high of Rs 1,087.40 intraday today, before closing up 2.7 percent at Rs 1073.25. Sun Pharma gained 1 percent after its Rs 165-crore deal with Strides Shasun received approval from the Competition Commission of India.

TCS hit 18-month low intraday, down 1.9 percent after missing estimates on dollar revenue front for the sixth consecutive quarter but analysts remained positive on the stock. EBIT margin declined 48 basis points while profit grew by 0.9 percent to Rs 6,109.5 crore in third quarter on sequential basis. Barclays retained overweight rating on the stock due to attractive valuations but lowers FY16 USD revenue growth estimate by 1.5 percent and reduced target price to Rs 2780 from Rs 2925.

Bharti Airtel lost 2 percent despite Orange decided to buy company's operations in Burkina Faso & Sierra Leone.

Among others, Tata Motors rallied 2.7 percent followed by HDFC, Mahindra & Mahindra, HUL and Hindalco with 1-2 percent upside. L&T, Lupin, Adani Ports, Dr Reddy's Labs and BHEL fell 1-3 percent.

In broader space, Glenmark Pharma gained 2.4 percent. Credit Suisse says it upgraded the stock to neutral as EPS CAGR over the next two years should be strong at 25 percent and the stock is factoring in a potential devaluation in Venezuela currency & a potential 5 percent miss in FY16 EBITDA guidance.