The benchmark index ended modestly higher by 52 points at 9,201 after giving up some of the gains in the late trade. Metal stocks were in the limelight today on improved manufacturing data in China.
Among the other key indices, Nifty added 19 points to 2,803. The BSE smallcap and midcap indices however ended in the red.
Sandeep Shenoy, head of equities at PINC Research, said that most of the triggers seem to be over. As of date, other than telecom there does not seem to be any safe sector, he said. He expects volatility in most of the sectors.
R Balakrishnan, ED, Centrum Broking said, “I think there is a downward bias. And the lows could be retested.”
Among the metal stocks, Ispat Ind gained over 12 per cent while Sesa Goa rose over 6 per cent. JSW Steel, Tata Steel and Sterlite Ind gained between 4 per cent and 5 per cent.
Realty and oil & gas stocks were the other major gainers today.
Among the Sensex pack, DLF gained over 5 per cent while Tata Steel, JP Associates, Sterlite Ind and Maruti gained between 3 per cent and 5 per cent.
Asian stocks advanced on Wednesday, with Tokyo's index up nearly 3 per cent, as better-than-expected news about the US and Chinese economies raised hopes the global downturn was nearing a bottom. European markets opened modestly higher.
The upward swing followed Wall Street, where investors breathed a little easier after a surprise jump in home sales in December suggested the battered housing market might soon stabilize.
Asian investors also were heartened by Wednesday’s report pointing to possible recovery in Chinese manufacturing. While manufacturing shrank again in January, the contraction was less severe than in recent months and seen by some as a sign China's stimulus measures might be taking hold.
But with the global economy and company results still in dire shape, the move higher was likely to be temporary, analysts cautioned. Amid the hopeful signs came more gloom on Wednesday from corporate bellwethers such as Australian mining giant BHP Billiton and Japanese electronics maker Panasonic Corp.
"It's a fictitious rebound. The figures are better than we thought, but they're still bad," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "It's encouraging of course, but it's far too early to say we're seeing a revival in the global economy."
Japan's Nikkei 225 stock average rose 2.7 per cent, while Hong Kong's Hang Seng Index added 2.3 per cent. South Korea's Kospi was up 2.8 per cent.
In Shanghai, the main index gained 2.3 per cent to 2,107.75 as traders welcomed news the purchasing managers index, a key gauge of manufacturing activity, rose to a four-month high of 45.3 percent on a 100-point scale. That was up from November's low of 38.8.
Elsewhere, markets in Singapore and Taiwan also advanced.
Overnight in New York, the Dow Jones industrial average rose 141.53, or 1.8 percent, to 8,078.36, galvanized by figures showing a key index of pending sales for pre-owned homes rose 6.3 per cent in December from the previous month.
