Sensex ends 107 pts higher; metals, autos rally

Mumbai: The market retained its upmove on the first day of February, showing a strong follow-up to the January rally. It smartly rebounded in the last couple of hours of trade - especially after positive European cues post China's PMI data.

Equity benchmarks closed at nearly two-month high. The Sensex rose 107.03 points, to close at 17,300.58 after showing 239 points recovery from intraday low of 17,061.55. The Nifty closed above 200 daily moving average, up 36.45 points to 5,235.70 led by metals, auto, capital goods, and index heavyweights Reliance and L&T.

However, experts expect correction soon as the market rallied more than 11 per cent in January.

PN Vijay, Portfolio Manager of www.askpnvijay.com feels that the market will correct very soon as it has gone up extremely sharply.

"The market needs to take a pause because it has been driven by flows, and on Wednesday helped good European cues. But Q3 results have been very mixed, the underpinning of the fundamentals don't justify this sharper move and I am envisaging that we will have a correction very soon," he reasoned.

European markets rose 1.5-2 per cent as improvement in Chinese PMI data offset Greece's fight for debt deal with creditors. China's purchasing manager's index expanded to 50.5 in January versus 50.3 in previous month. The Dow Jones futures gained 88 points.

Back home, index heavyweights Reliance Industries and L&T were up 1.8 per cent & 2.6 per cent, respectively. SBI, HDFC Bank and BHEL climbed 0.8-1.7 per cent.

Shares of Jindal Steel and Tata Power retained their top position in the buying list, shooting up 6-6.4 per cent.

Tata Steel, Hindalco and Hero Motocorp surged 4 per cent each; Sterlite went up 3 per cent. Tata Motors, M&M and Maruti Suzuki were up over 2 per cent post January sales numbers.

However, ICICI Bank, HDFC, ITC, ONGC and Bharti Airtel fell 1-1.5 per cent. Infosys and TCS were marginally lower.

Shares of Coal India lost 2.6 per cent as Coal Minister said the company has reversed the increase of coal prices due to GCV switch.

The market breadth was positive; about two shares advanced for every share falling on the BSE. The broader markets moved up 1-1.7 per cent.