Mumbai: Ignoring weak factory output data and rise in inflation, shares rallied at the National Stock Exchange (NSE) on value buying amid short-covering as the benchmark CNX-Nifty gained 25 points and closed above the 5,900 level on Tuesday.
The markets rallied on rising expectation that RBI may intervene sooner than later to boost the economy and the upcoming Budget will have some strong policy measures.
Trading began on a cautious note with modest buying seen in select index heavyweights ahead of IIP data release.
The sentiment got dampened after poor industrial output numbers came, showing sustained weakness in the economy, and triggered fresh selling pressure. But the key index rebounded from day's low in mid-afternoon trade with support of bargain hunting at existing levels.
Heavy buying was seen in energy, financials, pharma, FMCG, auto and infra-related stocks. Technology, realty and metal scrips, however, witnessed selling.
The index of industrial production (IIP) shrank for the second consecutive month to 0.6 percent in December 2012. This was in sharp contrast to a growth of 2.7 percent registered during the same month a year ago.
Further adding to the gloom, retail inflation remained in double digits at 10.79 percent in January.
Although the market regained some lost ground in today's trade, the overall sentiment is quiet cautious at this juncture. All economic data indicators show that the country's growth slowdown is getting worse, traders said.
The 50-share Nifty swung between a high of 5,927.65 and a low of 5,886.45 before concluding at 5,922.50, a gain of 24.65 points, or 0.42 percent, over the last close.
ONGC, Sun Pharma, HCL-Tech, Tata Motors, Coal India, Bharti Airtel, BPCL, Lupin, Bajaj Auto and HDFC Bank were among the top Nifty gainers. The key losers included Jindal Steel, ACC, IDFC, Infosys, DLF, Ranbaxy, Tata Power, Asian Paint, Sesa Goa and Axis Bank.
Turnover in cash segment rose to Rs 10,035.51 crore from Rs 9,461.48 crore yesterday. A total of 7,563.92 lakh shares changed hands in 53,83,989 trades. The market capitalisation stood at Rs 66,91,374 crore.