Markets ended a volatile session of trade higher as metal shares joined global rally after China avoided the path of raising policy rates.The Sensex fluctuated between gains and losses in a choppy session of trade.
The benchmark Sensex moved in 400 points range, swinging between 19,321 to 19,711 levels. Finally, the Sensex ended with a gain of 183 points at 19,692.
The Nifty jumped recovered 112 points from the lows of the day to end at 5,908 - up 50 points from the previous close.
BSE mid and small-cap indices outperformed the Sensex. Mid-cap index jumped 1.7% to 7,537. Small-cap index surged 2% to 9,134.
Heayweights helped the markets to rebound. Reliance contributed the most, followed by Larsen & Toubro.
Markets are on tenterhooks over raft of data expected this week: Inflation for the month of November on Tuesday, Federal Reserve Policy Meet on Wednesday and mid-term quarterly policy review on Thursday.
Thursday will also see the advance tax payment of corporates which may show how the December 2010 earnings is likely to be.
Rashesh Shah, Chairman, Edelweiss Group said, "The markets will remain subdued for the next five-six months due to high interest rates in India and low liquidity."
In the world markets, Asia ended mostly higher as investors took their Stride China's recent move to tame Inflation which is stubbornly high, over 5%.
The Shanghai Composite index was up 2.9%, while Hong Kong's Hang Seng index was up 0.7%. Japan's Nikkei Stock Average was up 0.8%, South Korea's Seoul Composite added 0.5%. Resource and metal shares were pulling the markets higher.
Analysts shrug of concerns of China cooling down and putting downward pressure on commodities. Shah said," commodity cycles have become compressed and they have become more efficient in managing supplies.
Overall, the commodities pack will be stable and will not collapse even if China's demand goes down because on the supply side there will be enough adjustment that will happen.
"Metal stocks have been on the buzzer bolstered rally in base metals in the global markets. BSE metal index jumped 2% to 16,322.
JSW Steel soared 8% to Rs 1,128. Welspun Corp, Nalco, Sail and Hindalco were some of the other gainers and jumped 3-6% each.
In India, analysts say that short-term trend remains negative for the markets. Deepak Singh Tanwar, Sound Equity & Consulting said "the rally has been impressive from the low of the day but is likely to face strong resistance around 5950-5975 as the trend still remains negative. Fresh short position should be taken only below today's low."
Power shares are also leading the sectoral pack led by GVK Power - up 7%, Seimens - up 3.3% and PTC India - up 3.8% in today's trades.
Realty stocks rose on bargain hunting after recent steep losses. Reliance Infrastructure jumped 3.6% to Rs 810. DLF was up 3.4% at Rs 293. Jaiprakash Associates added 1.5% at Rs 106.
Banking stocks recovered from a recent steep slide triggered by worries higher cost of funds will hit net interest margins.
Yes Bank added 4.5% to Rs 307. Punjab National Bank, Union Bank, IDBI Bank and Indusind Bank were among the big gainers. HDFC Bank advanced 1% to Rs 2,240. SBI was flat at Rs 2,750. ICICI Bank was down marginally at Rs 1,114.
BSE market breadth was fairly positive. Out of 3,016 stocks traded, 1,964 advanced while 882 declined.
