Sensex surges 300 pts; RIL underperforms

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The Sensex gained 315 points in  afternoon trade, supported by broad-based buying across sectors, barring in Reliance. The BSE benchmark was quoting at 18,163.49. Meanwhile, the Nifty rose 97 points to 5515.15 led by 47 stocks.

Fall in January inflation (which fell to 6.55% from 7.47% month-on-month) raised hopes that the Reserve Bank of India may consider rate cuts in the next policy meet after . Even strong inflow of foreign money was another reason behind today's rally.

The market has been continued its January rally in month of February as well. Saurabh Mukherjea, head of equities at Ambit Capital said the liquidity will continue to flow in February pushing the Nifty through one-way traffic towards the 6,000 mark.

All BSE sectoral indices were in the green barring oil & gas. Auto, Realty and Capital Goods indices shot up 3.5-4%. Bank, Power and Metal indices gained over 2%. However, Reliance Industries fell 1% after oil ministry sources say the company's D6 output may fall to 27 mmscmd from April. HUL too was down 0.6%.

Shares of Tata Motors climbed 7% after better than expected results in Q3. Maruti and M&M rallied 3.5-4%.

Among banks and financials stocks, ICICI Bank rose 3%; SBI, HDFC Bank and HDFC gained nearly 2%. Capital goods majors L&T and BHEL were up 4.4% & 2.6%, respectively.

Among others, Infosys, Bharti, TCS and Coal India moved up 1-2%.

Even the broader markets like BSE Midcap and Smallcap indices rose 1.3-1.9%.

In the second line shares, Voltas surged 19% post results. Sterlite Tech, Prism Cement, Kalpataru Power and Unitech were up 7-12%.

Smallcap stocks like Bhagwati Banquet, Great Offshore, KNR Construction, Inventure Growth and Lloyds Metals jumped 14-20%.

At 10:48 hours IST : Nifty hits 5500 first time since Aug '11; Tata Motors up 7%

The Nifty touched the 5500 level for the first time since August 1, 2011, led by auto, banks, capital goods, telecom and metals stocks. Asian markets too moved up further - Nikkei shot up 2.5% while others gained 0.8-2%.

Back home, the Sensex was up 281 points at 18,129.89 and the Nifty moved up 82 points to 5,500. However, index heavyweight Reliance Industries and FMCG major HUL declined 0.5%.

According to technical analyst Anil Manghnani of Modern Shares & Stock Brokers, market has a reached a point now where one should look to book profits. "If Nifty takes out 5460, then its suggesting that another probably 5,650-5,700 could be the next range," he added.

Tata Motors retained its top position in the buying list, rising nearly 7% post its stellar performance in third quarter numbers led by JLR sales. Tata Motors DVR rallied 15%. Among other auto stocks, Maruti rose 4.5%; M&M gained 2.8% and Bajaj Auto went up 1.4%.

Capital goods majors L&T and BHEL were up 3.6% & 2%, respectively. Index heavyweights ICICI Bank and Bharti Airtel rose 2.5%. SBI, TCS, Infosys, ONGC, HDFC and HDFC Bank climbed 0.7-1.6%.

The market breadth too was strong; about three shares advanced for every share falling on the BSE. The BSE Midcap Index was up 1.6% and Smallcap up 1.1%.