Sensex gains on positive global cues; IIP eyed

Moneycontrol Bureau

Key equity indices were up in early trade Wednesday, even as near term outlook remains hazy in the absence of any improvement in macro-economic indicators. (10 things you should know before the opening bell)

Also, rating agency Standard & Poor's on Tuesday cautioned that India faced a one-in-three chance of rating downgrade in the next two years, in case the government failed to push reforms.

The Sensex was up 48 points at 19435, and the Nifty was up 10 points at 5909.

Shares of IT and auto companies led early gainers, with TCS, Wipro, Infosys, Hero Motocorp and Bajaj Auto up around 1 percent each. Power utilities and bank shares were slightly down.

Brokers see the market consolidating around these levels for the next few sessions, and said further upsides would be driven by sentiment and liquidity, rather than fundamentals.

Equity benchmarks have risen by a better-than-expected 25 percent so far this calendar, as investors are hopeful that the government will be able to revive the economy through some key reform measures.

But not everybody is as optimistic.

"In our view, market returns in CY2013 will depend on the interplay between (1) reforms, which the Government may or may not be in a position to implement and (2) the reality of the Indian economy and earnings," said a note by brokerage house Kotak Securities.

Among secondline IT services firms, Satyam Computer and Tech Mahindra were up around 5 percent each.

Laggards in the banking space included Union Bank of India, Bank of India, IndusInd Bank, Yes Bank, Axis Bank and Bank of Baroda, all of which were down around 1 percent each.

Bank shares had rallied on Monday on hopes that the Banking Laws Amendment Bill would be passed without too many hurdles. However, there is some uncertainty over it, with the Opposition protesting against the inclusion of a new clause in the Bill.

Jet shares were up over 3 percent amid media conflicting reports on whether the proposed stake sale to Gulf carrier Etihad would go through.

Also read: Oct IIP data to grow 4.5% on core sector boost: Poll