Shrugging off poor IIP and inflation numbers, the Indian stock market today rose by over 100 points to snap its eight-day losing streak, on value-buying in ONGC, HDFC Bank, Tata Motors and RIL scrips.
The benchmark Sensex bounced back by notching up a gain of 100.47 points, or 0.52 per cent, to end the day at 19,561.04. The index had lost 545 points in last eight sessions to mark its longest losing streak since May 2011.
The 30-share barometer resumed the day better but fell to a low of 19,438.53 after the news of fall in industrial output growth and rise in retail inflation trickled in.
Growth in industrial output contracted by 0.6 per cent in December mainly due to muted activities in manufacturing and mining sectors. Retail inflation, on the other hand, remained in double digits at 10.79 per cent in January, driven by higher prices of vegetables, edible oil, cereals and protein-based items.
But soon buying sentiment picked up, mainly in key stocks from refinery, pharma, PSU and auto segments.
ONGC led the 17 gainers in 30-share Sensex by rising 3.81 per cent, followed by Sun Pharma, Tata Motors, Coal India and Bharti Airtel.
Brokers said investors bought fundamentally strong stocks available at attractive lower levels and ignored the lower industrial data and higher retail inflation.
"While this shows a poor performance on the industrial front, markets actually gathered an upward momentum. This suggests that the bad numbers are now factored in," said Nagzi K Rita, CMD, Inventure Growth and Securities.
Sectorally, the Oil and Gas index gained the most by rising 1.52 per cent, followed by Healthcare that rose 1.19 per cent and the PSU index which gained 1.15 per cent. Among other major losers, Jindal Steel closed over 3.3 per cent lower.
The broad-based National Stock Exchange index Nifty rose by 24.65 points, or 0.42 per cent, to close at 5,922.50.
Realty was the worst performer as it lost nearly 4 per cent. Unitech crashed 18 per cent after CBI removed a public prosecutor from the 2G spectrum case to verify his alleged discussions on prosecution strategy with the realty firm's MD.
Despite recovery in Sensex, the broader market was still under pressure as second-line stocks were at the receiving end with their indices BSE-Midcap and BSE-Smallcap falling by 0.31 pct and 0.51 pct, respectively, underperforming the Sensex.
All eyes are now set on the announcement of the data for wholesale price index (WPI) on Thursday, which stood at 7.18 pct in December 2012, much higher than the RBI's comfort level of 5-6 per cent.
FICCI President Naina Lal Kidwai said the data has "dimmed hope" for a recovery in manufacturing in the near future and it is a cause for serious concern.
Foreign institutional investors bought shares worth a net Rs 995.83 crore yesterday as per provisional data from the stock exchanges.
In the Asian region, the Nikkei rose by 1.94 per cent as Japanese shares jumped after the country's Economics Minister said share prices are too cheap and the yen hitting fresh multi-year lows while South Korea's Kospi eased by 0.26 per cent.
Major gainers from the Sensex pack were ONGC (3.81%), Sun Pharma (2.84%), Tata Motors (2.65%), Coal India (1.85%), Bharti Airtel (1.79%), Bajaj Auto (1.51%), HDFC Bank (1.39%) and RIL (0.94%).
However, Jindal Steel dropped by 3.35 pct, SterliteInd 1.31 pct, Infosys 1.29 pct and Tata Power 0.77 pct.
Among the sectoral indices, the BSE-Oil & Gas rose by 1.52 %, BSE-HC 1.19 %, BSE-PSU 1.15 %, BSE-Auto 0.94 % and the Bankex 0.63 %, however, the BSE-Realty dropped by 3.90 pct and the BSE-IT 0.63 %.
The market breadth continued to show negative trend as 1,289 scrips ended lower, while 864 stocks ended higher and 785 ruled steady. The total tunrover dropped to Rs 1,971.57 crore from Rs 2,140.33 crore on Monday.