Indian equities gained strength to continue their firm trade on back of global cues. The sentiments were mainly influenced by overnight rally in US markets amid intensifying hopes that additional stimulus is on its way from the US Federal Reserve following the initial jobless claims data which rose for the fifth time in last six weeks and as consumer prices fell 0.3 percent in May, the biggest drop in more than three years. On the global front, the Asian markets were trading on a mix note. Back home, traders were seen piling up position in Bankex, CD and Realty sector while selling was witnessed in CG sector. NSE's Nifty and BSE's Sensex were trading above their psychological 5,000 and 16,700 levels respectively.

The BSE Sensex is currently trading at 16,765.42, up by 87.54 points or 0.52%. The index has touched a high 16,817.27 and low 16,701.28 of respectively. There were 25 stocks advancing against 5 declines on the index. The market breadth on BSE was positive in the ratio of 1167:687 while 111 scrips remained unchanged

The broader indices were trading on a positive note; the BSE Mid-cap index was up by 0.42%, while Small-cap index was up by 0.37%.

The top gaining sectoral indices on the BSE were Bankex up 0.86%, CD up 0.80%, Realty up 0.80%, PSU up 0.76% and Oil &Gas up 0.69%. While, CG down by 0.06% was only the loser on the index.

The top gainers on the Sensex were Coal India up 1.98%, ICICI Bank up 1.57%, Tata Motors up 1.54%, Hindalco Industries up 1.50% and Gail India up 1.16%. On the flip side, Bajaj Auto down 1.73%, Sterlite Industries down 0.79%, Bharti Airtel down 0.44%, BHEL down 0.35% and HDFC down 0.33% remained the top losers on the Sensex.

Mean while, with the pressure mounting for a rate cut by the Reserve Bank of India (RBI) in its mid-quarter monetary policy review on June 18, Governor D Subbarao has said, inflation cannot be controlled without sacrificing some growth. The statement comes on a day when inflation for the month of May witnessed a surge to 7.55% from 7.23% seen in the previous month.

After the disappointing industrial production data, which registered a sluggish growth of 0.1% in April, market-men were expecting a cut in key policy rate (repo rate) to cut down cost of borrowings. However, with the annual rate of inflation, based on the wholesale prices index (WPI), inching up, it is now believed that the apex bank would have a difficult task in balancing growth and inflation in its monetary policy review.

Earlier, the RBI had slashed the key lending rate by 50 basis points to 8% after conteneously raising it for 13 times since March 2010 with an aim to control the stubborn inflation, which was hovering in double-digits for entire 2011. It also reduced the Cash Reserve Ratio (CRR) for banks 0.75% to 4.75% in March to infuse liquidity in the market. Moreover, the apex bank also called for fiscal steps by the government to control inflation.

Earlier this week, even the finance ministry pitched for a CRR cut mainly on the back of economic growth falling to a nine-year-low of 6.5% in the 2011-12 fiscal. The RBI, on the other hand, expects inflation to be around 6.5% by March 2013, with a warning that it would remain sticky and there is a need to arrest the decline in economic growth.

The S&P CNX Nifty is currently trading at 5,081.80, up by 27.05 points or 0.54%. The index has touched a high and low of 5,096.60 and 5,069.15 respectively. There were 40 stocks advancing against 9 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Ambuja Cement up 2.51%, IDFC up 2.06%, Coal India up 1.92%, ACC up 1.70%, and Hero Moto Co up 1.56%. On the flip side, Bajaj-Auto down 1.92%, STER down 1.08%, Sesa Goa down 0.91%, BHEL down 0.76% and Bharti Airtel down 0.62% were the major losers on the index.

The Asian equity indices were trading mixed trend; Jakarta Composite down 0.31%, Nikkei 225 down 0.04%,  KOSPI Composite Index down 0.64%, Shanghai Composite down by 0.04%.

On the flip side, Taiwan Weighted up 1.19%, Straits Times Index up 0.59%, Hang Seng Index was up 1.03% and KLSE Composite up 0.27% were the gainers.