Sensex ends at 18,000

Benchmark share indices ended higher amid a volatile trading session, shrugging off July IIP data which came in at 0.1%, led by metal, auto and capital goods shares.

The growth in July 2012 index of industrial production (IIP) was 0.1% higher as compared to the level in the month of July 2011.

The cumulative growth for the period April-July 2012-13 over the corresponding period of the previous year stood at -0.1%.

The 30-share Sensex ended at 18,000 up147 points or 0.82% and the 50-share Nifty ended at 5,431 up 41 points or 0.76%.

The Sensex and the Nifty reached an intra-day high of 18,012 levels and 5,436 mark, respectively.

On the global front, European shares and the euro rose on Wednesday while Italian and Spanish bonds were little changed after Germany's top court gave its backing to the euro zone's new 700 billion euro European Stability Mechanism bailout fund.

German approval of the ESM was crucial to boost the euro zone's crisis fighting powers and a key requirement for the European Central Bank's new plan to buy the bonds of struggling euro members.

European shares rose to stand up 0.14 percent on the day having stood up 0.07 percent just ahead of the decision.

The euro hit a new four month high of $1.29017 from $1.2845. German Bund futures fell to a session low of 139.75.

Asian markets ended firm with Nikkei, Strait Times, Hang Seng, Taiwan, Kospi and Shanghai gaining between 0.3-2%.

Back home, the rupee stays strong at 55.2625/2675 versus its previous close of 55.34/35. A softer-than-expected factory output number for July fails to have much impact on markets.

On the sectoral front, BSE Metal index zoomed over 2% followed by counters like Auto, Capital Goods, Technology, Consumer Durable, Realty, TECk, FMCG, Oil & Gas and Banks, all gaining between 0.5-1.3%.

However, BSE Healthcare and Power indices ended lower between 0.4-1%.

Tata Motors was the top Sensex gainer, up over 5% after the company said it is evaluating options for setting up a manufacturing base in Indonesia to serve the country and the ASEAN region.

Maruti Suzuki and Bajaj Auto 0.3-0.4%.

From the Metal space, Jindal Steel, Tata Steel, Sterlite and Hindalco surged between 0.2-4%. Steel shares recovered on short covering and value buying 

at lower levels after recent losses.

In the banking space, ICICI Bank and HDFC Bank were up 0.1-1.3% each on hopes that cut in key policy rates by the central bank would boost credit growth going forward.

Software majors firmed up ahead of the two-day US Federal Reserve meet which could announce stimulus measures to boost the sagging US economy.

Software majors earn most of their revenues from exports to the US. TCS and Wipro were up between 2-2.5% while Infosys ended with marginal gains.

Realty shares were up on hopes that lower interest rates will boost home loan growth. Godrej Properties was up 1.6% after it launched its second project in Gurgaon on Tuesday– the 21 acres 'Godrej Summit'. Other gainers include DLF and Indiabulls Real Estate.

Capital Goods major L&T zoomed nearly 3% after the company said that its construction arm L&T Construction has won new orders valued at over Rs 1,065 crore across various business segments in September 2012.

Dr Reddy's Laboratories moved higher by 2% after the company said it has launched Metoprolol Succinate tablets used for treating high blood pressure in the American market.

Other notable gainers included HUL, ITC, RIL and ONGC.

On the losing side, shares of power generation companies are under pressure after the Indices of Industrial Production of electricity sector reported 2.8% growth in July 2012 compared to 13.1% a year earlier.

The sector had recorded 8.8% growth in June 2012. NTPC and BHEL declined by almost 2% each.

Other notable losers included Cipla, GAIL, Hero Moto and Sun Pharma.

Among other shares, Kemorck Industries and Exports continue to witness selling pressure and was locked in 5% lower circuit at Rs 73.65.

Siemens Limited ended lower by 3% at Rs 676 on reports that Siemens AG, the promoter of the company, may sell part of its holding.

The broader indices ended marginally higher – BSE Midcap and Smallcap indices ended up 0.4% each.

The market breadth ended positive with 1,575 advancing and 1,308 shares declining.