Sensex shrugs off weak IIP, crosses 18,000 on Germany's euro bailout nod

Edged up by German Court’s decision to back euro rescue fund, the Sensex touched 18,000 mark, 147 points higher (0.82 perent) its six-month high and the Nifty closed at 5431, 41 points higher (0.76 percent) despite factory output growth at near zero in July.

A German constitutional court today approved the ESM crucial to boost the euro zone’s crisis fighting powers. It is a key requirement for the European Central Bank’s new plan to buy the bonds of struggling euro members.

Indian gold extended gains with 0.69 percent higher on Wednesday afternoon to hit another record high powered by strong overseas markets.

[caption id=“attachment_453131” align=“alignleft” width=“380”]  Reuters[/caption]

The Index of Industrial Production (IIP) data, which was under keen watch by the markets rose marginally by 0.1 percent in July compared to 3.7 percent, in the previous year. Polls has pegged growth at 0.3 percent.

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The Inter-Ministerial Group (IMG) met today to decide on the allocation of coal blocks following its last week’s review of the progress made in developing them. Shares of Reliance Power was up 0.43 percent, Jindal Steel and Power up close t 4 percent

Bringing some respite to the policy logjam, the news of government preparing measures to potentially allow foreign investment in aviation spiked up shares of airlines including Kingfisher Airlineswhich rose 7.82 percent, Spicejet was up 7.12 percent and Jet Airways was up 5.22 percent.

Among the sectoral indices, Metals, Auto and Capital Goods were top gainers.

Conversely, HSBC downgraded Indian stocks to “underweight” from “neutral”, saying the debt crisis in Europe would be a drag on global equities, while at home, the country has seen no progress on fiscal consolidation or structural reforms.

Stocks in news

Tata Motors was up 4.14 percent on anticipation of a boost in sales when the auto maker will release a fourth-generation Range Rover in October. Investment banking group Jefferies said in a note that the successful launch of Range Rover could add significantly to earnings.

Apollo Tyreswas up 6.36 percent after after Bank of America-Merrill Lynch raised its target price to Rs 135 from Rs 115 , and maintained “buy” rating on the stock expecting its EBITDA margins to sustain improvement through 2014.

Siemens slipped further 3.24 percent since the opening session after its parent company indicated offloading 4 million shares to raise $50 million.

Bhel was down 1.64 percent after financial-services firm Nomura has said in a research note that the coal scam is likely to result in cancellation of about 28 percent of the company’s order book.