Sensex, Nifty up over 2%; Midcap strong, Reliance & ICICI lead

Moneycontrol Bureau12:59 pm Market strong: The Sensex rose 545.09 points or 2.37 percent to 23531.21 and the Nifty climbed 174.40 points or 2.50 percent to 7155.35.About 1949 shares advanced against 501 advancing shares on the BSE.12:50 pm Oil Update: Brent and US crude futures edged lower as the dollar regained ground and as weak Chinese trade data stoked concerns about demand in the world's biggest energy consumer.

But the market held most of its gains of more than 10 percent from Friday that came amid renewed talk that the Organization of the Petroleum Exporting Countries (OPEC) might finally agree to cut output to reduce a world glut.

The mood inside OPEC is shifting from mistrust to a growing consensus that a decision must be reached on how to end the global oil price rout, Nigeria's oil minister said, adding he will have talks with his Saudi and Qatari counterparts.

12:40 pm Interview: We are hoping the government will soon extend duties like minimum import price (MIP) to other steel products as well, says RK Goyal, MD of Kalyani Steels in an interview to CNBC-TV18.

Volumes for the third quarter were down 12-15 percent because of dumping from China, Korea and Japan and the impact will continue if no corrective action is taken, Goyal says.

Even though MIP is not available on products produced by Kalyani Steels, Goyal hopes that the duty imposed on certain products might dissuade importers from cutting down imports across categories.

“The government is still looking at other steel products that are being imported. So we hope that either it extends the MIP to other steel products or importers stay cautious while importing any product,” he says.12:20 pm OMCs rally post Q3: Shares of Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation rallied 5-10 percent intraday. Strong refining performance due to lower oil prices helped these oil marketing companies (OMCs) report strong earnings performance in October-December quarter.

Jefferies says India state-owned OMCs remain top picks in the oil & gas sector as it believes consensus and market is under-estimating earnings potential of these companies in a low crude price environment. Recently International benchmark Brent touched 12-year low at around USD 27 a barrel.Also read - Sell into pre-Budget rally; market lacks leadership: Dimensions12:00 pm Market Check

The market continued to be strong with the Sensex rising over 500 points led by short covering in beaten down stocks like banks, oil, infra and auto stocks. The broader markets also gained strength, outperforming benchmarks.

The Sensex rallied 525.87 points or 2.29 percent to 23511.99 and the 50-share NSE Nifty climbed 168.65 points or 2.42 percent to 7149.60. The BSE Midcap and Smallcap indices gained more than 3 percent.

The market breadth was strong as about four shares advanced for every share declining on the Bombay Stock Exchange.

Reliance Industries, L&T, ICICI Bank, Tata Motors, SBI, Lupin and Axis Bank were top contributors' to Sensex gains, up 4-7 percent. Tata Steel topped the buying list on Sensex, up over 10 percent.

Bank of Baroda extended rally in noon trade, up more than 22 percent as brokerages maintained buy rating, though they cut target price and earnings per share estimates due to huge loss in Q3.WPI inflation for January contracted further, came in at -0.9 percent against -0.73 percent in previous month.Asian markets remained strong with the Nikkei rising 7.2 percent to close above 16,000 level. Hang Seng gained 3.1 percent while Shanghai recovered from day's low.