Nifty hits 5300; SBI, NTPC, HDFC, L&T lead

The benchmark Nifty smartly bounced back on the back of short covering and touched the 5300 mark in afternoon trade, supported by financial, auto, power, Anil Dhirubhai Ambani Group and infrastructure companies' shares. Heavyweight Reliance Industries too bounced back with one percent rise at 14:56 hours. In actual, the most beaten down stocks in previous sessions were seeing short covering.

Even market breadth improved - about four shares advanced as against one share declined on National Stock Exchange. The Sensex recovered more than 350 points from day's low today.

However, the sell-off continued in Bharti Airtel, HUL, BHEL, ONGC, Tata Power and ONGC. Metal stocks too were under selling pressure.

Experts feel that the markets looked priced in all negative factors which we saw in recent past. They too expect the short covering in markets as market was oversold in previous two weeks.

The 30-share BSE Sensex rallied 206 points to 17,669 and the 50-share NSE Nifty jumped 70 points to 5,296.

Among frontliners, Jaiprakash Associates, Reliance Infrastructure, HDFC, ICICI Bank, SBI, IDFC and PNB rallied 3-7%.

L&T, Sterlite Industries, Bajaj Auto, NTPC, Tata Motors, HDFC Bank, Maruti, M&M, Hero Honda and Reliance Communications moved up 1-3%.

In midcap space, Gitanjali Gems, JM Financial, Himadri Chemical, UTV Software and Sobha Developer gained 11-18%.

However, Parsvnath, AIA Engineering, KGN Industries, Bombay Dyeing and Shiv Vani Oil fell 4-5%.

In smallcap space, Provogue, Everonn Education, Shirpur Gold, Welspun Project and Page Industries surged 12-18%.

However, R M Mohite, Talwalkars Fitness, Chromatic India, Lumax Inds and Bheema Cements lost 5-10%.

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Nifty recovers to test 5250; banks, auto lead

Indian equity benchmarks recovered smartly from day's low to back above 5200 but remained choppy a bit at 13:28 hours. Financials led the major support followed by L&T and NTPC. Auto companies' shares too were quite supportive.

However, the sell-off in telecom, metal, PSU oil & gas, technology, Anil Dhirubhai Ambani Group, FMCG and private sector power companies' shares limited the gains.

Alok Sama of Baer Capital feels the worst is probably over for India. "We have probably seen the worst run-up in oil prices. Also, I feel inflation fears here are probably over-done," he told CNBC-TV18.

On the back of a fairly robust earnings growth, he feels 17,500-18,000 on the Sensex and 5,000 on the Nifty are reasonable levels to think of in terms of markets being well supported.

The 30-share BSE Sensex was trading at 17,521, up 58 points and the 50-share NSE Nifty gained 22 points at 5,247. The broader indices too jumped nearly one percent.

Benchmarks were fallen when the December IIP data announced but experts feel that these numbers. The industrial output came in in-line with expectations but the sectoral growth was quite disappointing.

A growth in index of industrial production (IIP) for December was 1.6% as against 2.7% in previous month. Consumer non-durables growth was in negative 1.1% versus positive 3% and capital goods growth too came in negative 13.7% versus 42.9% (YoY). Growth in segments like manufacturing, consumer durables and mining fell sharply while electricity sector growth improved at 6% as against 5.4% (YoY).

DK Joshi principal economist at Crisil, too expressed no surprise at the numbers and said that a strong base was expected to pull it down.