Markets end at 1-week high, Nifty regains 5,700

Benchmark indices closed the trading session on a higher note amid firm global cues, along with rate-sensitive sectors leading the rally.

Rate sensitive shares rose after the RBI chief Duvvuri Subbarao said that "perhaps" there was a need to reduce the reserves that banks have to set aside via the cash reserve or the statutory liquidity ratios.

The 30-share Sensex closed at 19,230 mark up 283 points whereas the 50-share Nifty ended higher by 87 points at 5,699 levels.

The Sensex and Nifty have touched an intra-day high of 19,160 and 5,677 levels, respectively.

The Sensex and 50-unit CNX Nifty, both, hit one-week high.

Among broader markets, BSE Midcap and Smallcap indices ended higher over 1%. The market breadth in BSE ended healthy with 1,444 shares advancing and 899 shares declining.

GLOBAL MARKETS

Japan's Nikkei share average bounced back on Tuesday as the yen weakened against the dollar after a media report that Prime Minister Shinzo Abe is considering a corporate tax cut to help offset the impact of a planned two-stage hike in the sales tax.

The benchmark Nikkei rose 2.6 percent to 13,867.00 and the broader Topix gained 2 percent to 1,157.15 in very thin trade.

Index heavyweights and blue-chip exporters led the gains, with SoftBank Corp and Fast Retailing Co Ltd up 6.3 percent and 4.3 percent, and Panasonic Corp climbing 3.8 percent.

European shares hit a 2-1/2 month high and the dollar was on course for its first three-day rise since June on Tuesday before data expected to paint an improving economic picture on both sides of the Atlantic.  CAC, DAX and FTSE surged between 0.3-1%.

A sentiment survey from Germany is seen bolstering recent signs of momentum in Europe's powerhouse economy while the fastest rise in British house prices in seven years signalled the pick-up going on there too.

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INDIAN RUPEE

The rupee recovered in trades today after witnessing a marginal drop earlier on hopes of more measures in the near-term to support currency.

India's finance minister announced a slew of measures on Monday in a bid to relieve some of the grinding pressure on the currency, focusing on curbing imports and raising money abroad.

At 4PM IST, the Rupee was trading at 61.16 against dollar compared to previous close of 61.27 per USD on the Interbank Foreign Exchange Market.

GOLD

Continuing its rising streak for the fifth straight day, gold prices rallied to four-month high by rising Rs 565 to Rs 29,825 per ten grams in the national capital today on rising demand for the festive season amid a firm global trend.
 
The current upsurge in gold prices placed the metal to a level last seen on April 10.

The government today increased import duty on gold, silver and platinum to 10% with a view to arrest the declining value of rupee and contain the fiscal deficit to 3.7% of the GDP.

SECTORAL INDICES

Rate sensitive sectors like Realty, Auto and Banks have zoomed between 2-3%. Sectors like Power, Healthcare, IT, Consumer Durables, Capital Goods and Oil & Gas have gained by 1% each. Apart from Metal, all the major BSE sectoral indices are trading in green zone.

Shares of rate sensitive sectors such as banks, auto and realty moved higher as the Reserve Bank of India chief Duvvuri Subbarao said that "perhaps" there was a need to reduce the reserves that banks have to set aside via the cash reserve or the statutory liquidity ratios.

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STOCKS

M&M, Bajaj Auto, Tata Motors and Hero Moto and Maruti Suzuki from Auto sector surged between 1-4%.

Mahindra & Mahindra rose 3% amid speculation the share could be added to the MSCI Emerging Markets index soon. M&M shares were at Rs 893.15 at 10:55 am on Tuesday.

From the banking space, HDFC Bank, Axis Bank, ICICI Bank, SBI and  HDFC rose between 1-7%.

Realty majors like Oberoi Realty, DB Realty, DLF, Peninsula Land and Anant Raj Inds spurted between 3-13%.

IT majors ended higher on weak rupee. Wipro, TCS and Infosys gained between 1-3%.

Cipla extended yesterday’s gains and surged by over 3% on reporting strong Q1 nos. However, Morgan Stanley has downgraded Cipla to "underweight" from "equal-weight" and reduces its target price on the stock to 386 rupees from 414 rupees citing slower growth prospects and valuations.

Other notable gainers were NTPC, DRL, GAIL, Tata Steel, Tata Power and Bharti Airtel.

On the losing side, Hindalco Industries was the top Sensex loser, ended lower by over 2% at Rs 91.45.

Coal India, ONGC and JSPL declined between 1-2%.

SMART MOVERS

Bajaj Finance surged 10%, extending its previous day’s nearly 8% rally, after the foreign investor Acacia II Partners LP bought more than three lakh shares of non-banking finance company for Rs 33 crore.

Autoline Industries rallied over 7%, extending its previous day’s 20% surge, after the company said Autoline Industrial Parks Limited, a subsidiary of the company, has executed a term sheet with Smart Value Homes Limited, a wholly owned subsidiary of Tata Housing Development Company to explore the possibility of development of Special Township on its land located at Chakan (Pune).

DLF gained over 8% after the company reported results, which were above expectations, and on analyst upgrades. Analysts at Motilal Oswal upgraded their FY14/15 EPS by 7-11% to factor better operating profits from non-core business (hotel) and potential cost savings after divestment of insurance business by 2HFY14, which currently contributes to an annual loss of Rs 130 crore.

Tech Mahindra ended higher over 5% after reporting 36% quarter-on-quarter (qoq) jump in its consolidated adjusted net profit at Rs 686 crore for the quarter ended June 30, 2013 (Q1) on back of higher non-operating income from forex gains.