Sensex rules firm for the 3rd day; banks, metals shine

The 30-share Sensex ended higher by 330 points at 27,702 and the Nifty surged 99 points at 8,324 levels.

However, the broader markets underperformed the benchmark indices- BSE Midcap and Smallcap indices gained between 0.4-01%. The Foreign portfolio investors (FPIs) continue to remain net sellers.

They sold shares worth a net Rs 668.85 crore during the previous trading session on Friday, as per provisional data.

At 15:43, the rupee was trading at 63.22 versus Friday's close of 63.2950/3050. Volumes are thin in the holiday-shortened Christmas week.

Markets will remain volatile this week as traders will roll over positions in the futures & options (F&O) segment from December 2014 series to January 2015 series. World share markets extended their 'Santa rally' into a fourth day on Monday, as a recovery in beaten-down oil prices and the rouble and more calls for quantitative easing from the ECB helped lift sentiment.

There were also hopes that Greece could avoid destabilising snap elections after Greece's Prime Minister Antonis Samaras made a surprise offer to bring pro-European independents into the government if they backed his choice for new president.

Japanese stocks advanced on Monday as rebounding crude prices underpinned oil-related shares. The Nikkei benchmark ticked up 0.1% to end the day at 17,635.14, its highest closing level since Dec. 9.

Back home, BSE Bankex, FMCG and Power indices surged by almost 1.5%.

Sectors like Auto, Consumer Durables, Healthcare, Metal, Oil & Gas and Realty gained between 0.5-1.4%. From the financial space, HDFC, HDFC Bank, Axis Bank, SBI and ICICI bank rose between 1-3%.

HDFC Bank gained over 2% after Foreign Investment Promotion Board cleared its proposal to raise Rs 10,000 crore, ending months of struggle by India's most valuable bank by market cap to enhance its capital base.

The union cabinet recently approved a proposal to pare government's stake in public sector banks in a phased manner that will allow these lenders to raise up to Rs 161,000 crore from the market.

BHEL has achieved breakthrough by making maiden entry in the Turkish market; Bags Euro 16.96 million contract for Thermal Power Project in Turkey.

The stock gained almost 3%. Jindal Steel and Power moved higher by over 6% after the company said it has raised Rs 500 crore by issuing 5,000 non-convertible debentures for cash to Kotak Mahindra Bank. Other notable gainers were M&M, Coal India, NTPC, ONGC and Bharti Airtel.

The power generation sector would do well to unbundle state utilities and purchase power under the ‘cost-plus’ route, EY has said in a report on the power sector.

On the losing side, Hindalco, L&T, Infosys and Tata Steel fell between 0.1-1.2%.

Among other shares, Cairn India moved higher by 3%, extending its 4% gain in past two trading sessions on BSE, after crude prices surged from the lowest closing levels.

SpiceJet soared 17% to Rs 18.60, extending its Friday’s rally on BSE, on media reports the company could see a change of management and get new funds.