Indian markets bounced back from the day's low with the benchmark indices rising to the intraday high in the last hour of trade. The Sensex traded over 60 points or 0.36% higher at 17,255 and the broader Nifty index advanced over 20 points to take out 5,200 levels.
A jump in the manufacturing PMI data in January (57.5) boosted sentiments. December and November PMI stood at 54.2 and 51 respectively.
"The worst is behind us... valuations are cheap... the macro environment seems to be stabilizing... the interest rate cycle is firmly on the downtrend," Nitin Rakesh of Motilal Oswasl told NDTV Profit. A huge influx of foreign funds has helped markets, he added.
Auto companies led the rally today on the back of strong sales number in January. Ashok Leyland (4.4%), which was yet to report numbers, was the top gainer on the Bombay Stock Exchange auto index. Hero MotoCorp (3%) also traded higher ahead of numbers.
Maruti (2.7%) beat estimates to post 5% rise in January sales while M&M (2.5%) reported its highest ever monthly sales.
Metal and capital goods counters also saw strong buying interest. JSPL (4.7%), Hindalco (4.5%) and Tata Steel (3.8%) were among the top gainers on the Nifty index.
Crompton Greaves (6.3%) rebounded strongly and was among the top gainers on the BSE cap goods index. Gammon India (9%), Punj Lloyd (6%) and Suzlon (4%) were the other big gainers in cap goods space.