Sensex soars over 250 points; Tata Motors gains 4%

Indian markets witnessed a strong bounce back Wednesday, with the BSE Sensex rising nearly 300 points after days of bearishness. The Nifty index neared the 4,950 mark.

Markets in Asia traded higher and the rupee held on to the gains, helping sentiments on the Street. The rupee traded 18 paise higher against the dollar at 55.46 at 10.55 a.m. The Sensex was up 270 points or 1.7% at 16,290, while the Nifty gained 82 points to 4,945.

Banking stocks (1.9%) led the gains for a third straight day. India's economic growth has slowed to a nine-quarter low and investors are hopeful of a rate cut later this month.

PSU lender Bank of Baroda (2.7%) and private lenders like Axis Bank (2.5%) and HDFC Bank (2.4%) were among the top Nifty gainers.
"The build-up in bank stocks is in anticipation of a rate cut... All these gains would ease off if there is a status quo on rates," Gaurang Shah of Geojit BNP Paribas said.

Rate sensitive stocks like auto (2.4%) and realty (1.9%) also saw strong buying interest. Tata Motors (4.1%) made a smart come back. The stock has lost 20% over the last week on fears of margin compression in the luxury JLR models. Hero Moto (3.7%) also saw gains.

Tobacco major ITC (3.5%) was the top contributor to Sensex gains today.

Only four stocks traded lower on the Nifty index. Healthcare stocks like Dr Reddy's (-1%), Ranbaxy and Cipla saw some selling amid risk on trade.

The market breadth was strong with over 88% stocks rising on the broader BSE 500 index.