After two days of profit booking, Nifty hit a fresh record high the Sensex extended gains from the morning after a sharp rally in the public sector and auto stocks re-injected positive sentiment in the market.

At about noon, the Sensex was up 0.37 percent at 80,252 and the Nifty was up 0.30 percent at 24,392. About 1,766 shares advanced, 1,575 shares declined, and 89 shares unchanged.

As for the midcap and smallcap index (broader market), they underperformed the headline indices, reversing the trend from the morning. The two indices rose 0.22 percent each. The midcap index has gained 2 percent since the start of July while the smallcap index has risen 3.32 percent.

India VIX or the fear gauge, however, rose 3 percent to cross 14.

Sectoral Trend

The auto sector witnessed a sharp rally led by Maruti Suzuki which rose over 5 percent. The surge in the counter came on the back of Uttar Pradesh waiving registration fees on Hybrid cars. The state is offering a 100 percent waiver on registration fees for strong hybrid electric vehicles and plug-in hybrid electric vehicles. This news is positive for companies like Maruti, Honda, and Toyota, that manufacture hybrid cars. PSU Bank index and FMCG also surged up to two percent. Energy and Infra index were little changed.

Fundamental View

"The market is exhibiting strength and is showing no signs of a sharp correction despite the high valuations. A healthy trend in the market is that fundamentally strong large caps are seeing buying," V K Vijayakumar, chief investment strategist at Geojit Financial Services said. He also added that it appears that the market is waiting for triggers for a breakout from the present levels and those are likely to stem from Q1 earnings.

Technical View

"Nifty has witnessed some consolidation near the 24,300 zone halting the rally. With a positive bias, the index can continue to rise once a decisive breach above the 24,400 level is confirmed," Vaishali Parekh, vice president of technical research at Prabhudas Lilladher said. Parekh added that the important support of the 24,000 level shall be intact and one can anticipate further gains in the coming days. Sensex also has been hovering near the 80,000 zones since the last few sessions and would need to break above the 1.61 percent retracement level of the 80,700 zones for a further uptrend.

Key Nifty gainers

Maruti Suzuki, ITC, M&M, SBI, Cipla

Key Nifty losers

ONGC, Kotak Mahindra Bank, Reliance Industries, Grasim, UltraTech Cement

Key Sensex losers

Maruti Suzuki, ITC, M&M, SBI, and Titan Company

Key Sensex losers

Kotak Mahindra Bank, Reliance Industries, UltraTech Cement, Tech Mahindra and NTPC.

Stock Moves

Affle India: Shares hit a 52-week high after Citi initiated coverage with a 'buy' rating citing robust growth prospects. Analysts at Citi have assigned a target price of Rs 1,600 per share, implying an upside potential of 17 percent from the current market levels.

HG Infra Engineering: Shares rose after the company signed a MoU with Ultra Vibrant Solar Energy to acquire shares or voting rights in project companies.