The markets ended firm on Wednesday led by a rally in metal and banking stocks. The benchmark BSE Sensex gained 122, or 0.9 per cent to close at 13,692 levels. In the broader markets, Nifty surged 0.8 per cent to end at 4161 levels.
Global financial markets showed some signs of stability after Warren Buffett's Berkshire Hathaway announced that it would invest at least $5 billion in Goldman Sachs. US stock futures rose after this announcement. The Dow futures were up 144 points and the Nasdaq futures were up 25.25 points.
The move of Japanese brokerage Nomura Holdings also boosted the investor sentiments. Earlier, Nomura said it would buy Lehman Brothers' operations in Europe and the Middle East.
But uncertainty over the massive US bailout package prevailed.
Major Asian markets ended in the green turf with South Korea’s Kospi, Hong Kong’s Hang Seng and Shanghai Composite gaining 0.5 per cent each.
“The markets will remain range bound with a slight negative bias. The happenings in the US markets need to be closely watched,” said Apurva Shah, head of research, Prabhudas Lilladher . He also said that portfolio design for investors should be on the defensive side.
Among the Sensex stocks, Sterlite Industries was the top gainer, up 8.4 per cent after the company announced its board’s decision to not to pursue the proposed restructuring scheme.
Other prominent gainers in the group included HDFC Bank, Tata Steel and Reliance Infrastructure.
“Global risk aversion would impact investment in emerging markets but long term bias remains positive for the markets,” said Vikram Kotak, CIO, Birla Sun Life Insurance Co.
The metal index on the BSE surged 2.2 per cent to end at 10,142 levels while the banking and oil and gas index gained over 1.2 per cent each. Prominent gainers in the banking pack were IndusInd Bank, Axis Bank and HDFC Bank.
The IT index, on the other hand, continued its downslide. It shed 1.1 percent to close at 3417 levels. Top loser in this sector was Wipro, which lost over 5 per cent.
“ The key issue behind the decline in IT stocks is the mess in US financial markets. Many IT companies in India have contracts with troubled US companies and that remains a concern for the markets,” said Gaurang Shah, Chief Manager, Geojit Financial Services.
(With Capital Market inputs)