Sensex surges 400 pts; ONGC soars 6%, Infosys & Axis lead

Moneycontrol Bureau10:45 am Iron ore prices weak: Spot iron ore prices held near one-month lows and were headed for their steepest weekly fall since early July, with the raw material failing to catch up with a recovery in other commodities amid weak steel prices in China.

Chinese spot steel prices dropped for most of the week, reflecting slow demand in the world's top consumer.

"Mills have been trying to push up steel prices but demand is really weak. It's difficult for them to sell their products unless they lower the price," said a Shanghai-based trader.

Some Chinese mills in the top producing province of Hebei have halted or limited production to clear skies ahead of a big military parade to commemorate the 70th anniversary of the end of World War Two in nearby Beijing, reducing demand for iron ore.

Iron ore has lost 4.1 percent so far this week, largely reflecting its Monday slide when a slump in China's equity markets fed a global rout that stretched to commodities.10:30 am Buzzing: Investors continued to buy shares of Aurobindo Pharma. The stock rallied 4.6 percent intraday (in addition to 3 percent upside in previous session) after brokerage Citi has maintained Aurobindo as its top pick and sees 50 percent potential upside.

The pharma company on Thursday received final approval from the US Food & Drug Administration to manufacture and market Entecavir tablets. It is a bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Baraclude tablets of Bristol-Myers Squibb.

Entecavir tablets are indicated for treatment of chronic hepatitis B virus infection of the liver. The product has an estimated market size of USD 294 million for the twelve months ending June 2015, according to IMS.

The brokerage expects Entecavir to be a potentially chunky and sustainable product for Aurobindo. It is only the third generic company (after Teva & Par) to get approval for thisproduct.

It does not see too many additional competitors in the near future. This should keep price erosion & profitability at attractive levels, Citi said.

Generic Entecavir is Aurobindo's 15th approval in FY16 compared to only 3 approvals in FY15. If this pace continues, revenues could ramp up meaningfully over the next few years, said the brokerage in its latest note.10:15 am Market Expert: Sanjeev Prasad, Kotak Institutional Equities said they at brokerage found valuations of the Indian market more reasonable post the recent sharp correction. Lower valuations and weaker rupee post the recent market selloff can provide for meaningful returns of 15-18 percent over the next 12 months, he believes.

He said the brokerage sees increasing likelihood of a rate cut at the next policy meeting.10:00 am Market Check

Equity benchmarks maintained uptrend for the second consecutive session. The Sensex rallied 399.57 points or 1.52 percent to 26630.76 and the Nifty climbed 126.35 points or 1.59 percent to 8075.30.

The broader markets marginally outperformed benchmarks. The BSE Midcap and Smallcap indices gained over 1.5 percent. Nearly five shares advanced for every share declining on the Bombay Stock Exchange.

ONGC topped the buying list on Sensex, up nearly 6 percent followed by Infosys, Axis Bank, SBI, NTPC, Bajaj Auto, Cipla, BHEL, Vedanta, GAIL, Hindalco and Tata Steel with 2-4 percent upside.