Nifty rallies for 3rd day on oil slide, rupee gain; Sensex closes up 241 pts, midcaps outperform

"It's indeed a positive start of the F&O expiry week especially when the participants are in fix over next directional move," Jayant Manglik, President, Religare Broking said.

However, he reiterates view to continue with stock specific trading approach while keeping close watch on global developments and crude oil price for further cue.

Oil prices continued to correct sharply, with Brent crude futures falling 1.4 percent to $75.35 a barrel as Saudi Arabia and Russia may increase supplies. Rising US production also showed no signs of abating. It started sliding after hitting 3-1/2-year high of $80.50 a barrel on May 17, 2018.

Asian markets ended mixed amid extended slide in oil prices. European stocks were trading mildly higher despite political uncertainty in Italy.

Meanwhile, the Indian rupee gained 34 paise to end at 67.42 against the US dollar against Friday's close of 67.77. It gained more than a percent from its 18-month low of 68.42 a dollar hit last week.

The Nifty Midcap index outperformed frontliners, rising 1.4 percent on strong market breadth. More than two shares advanced for every share falling on the NSE.

Nifty Bank, Auto, Metal, Pharma and Realty indices gained 1-2.4 percent.

Sun Pharma was the biggest gainer among sectoral indices, rising 7 percent after March quarter earnings. Global brokerage house CLSA has upgraded the stock to Buy from Sell and also raised target price to Rs 600 (from Rs 445) as it believes earnings have bottomed in FY18. "EPS will nearly double as monetisation of specialty pipeline begins."

Oil retailers HPCL, BPCL and IOC jumped 4-6 percent following correction in oil prices. Jet Airways (up 7.7 percent) and InterGlobe Aviation (2.4 percent) also participated in the rally on hope of likely fall in aviation turbine fuel prices.

SpiceJet was locked at 20 percent upper circuit after Stewart & Mackertich Research initiated coverage on the airline with a strong Buy rating and set a target price of Rs 154 on the stock, which implies an upside of over 50 percent compared to closing price of May 25, 2018.

Technology stocks - TCS, Infosys and HCL Technologies were down 1-2 percent after recovery in rupee. Tech Mahindra dropped 4 percent despite strong earnings in March quarter.

L&T share price was up 2.6 percent ahead of earnings announced after market hours. The engineering and construction major expects 12-15 percent growth in revenue and 10-12 percent in order inflow for FY19. Profit and operational income in Q4 beat analyst estimates while revenue was in line.

HDFC Bank, ITC, ICICI Bank, Maruti Suzuki, SBI, Indiabulls Housing and Axis Bank among others gained 1-4 percent whereas Bajaj Finance, Power Grid, Bajaj Finserv, Bharti Infratel and Hindalco were down 1-2 percent.

Manpasand Beverages closed at 20 percent lower circuit after Deloitte resigned as an auditor of the company.

Just Dial rallied 20 percent while GNA Axles, Subros and Vascon Engineers rose 5-11 percent after March quarter earnings.