The key benchmark indices remained firm after strong opening tracking firm Asian markets. Reliance Industries edged higher. Capital goods and metal stocks extended gains. Power stocks were in demand. Bharat Heavy Electricals was the top gainer from the Sensex pack. The market breadth was strong.

Asian markets, which opened before Indian markets, soared after weak US economic data and comments from a Federal Reserve official signalled that US interest rates will continue to head lower. Fed Vice Chairman Donald Kohn said on Tuesday that a weak US economy was a bigger worry than higher inflation risks.

At 11:20 IST, the 30-share BSE Sensex was up 296.60 points or 1.67% at 18,102.79. Sensex touched a high of 18,137.28 in mid-morning trade. At days high, Sensex rose 331.09 points.

The broader CNX S&P; Nifty was up 88.7 points or 1.67% at 5358.25.

The next major trigger for the market is the Union Budget 2008-09. With general elections due in 2009, Union Budget 2008-09 to be presented on 29 February 2008 will be the last full-fledged budget of the Congress-led United Progressive Alliance government and it is therefore likely to be a populist budget. Thus, the Finance Minister (FM) is likely to provide higher allocations to several social initiatives like rural upliftment, employment, education, agricultural growth and public health.

Though populist measures will dominate the budget, FM is also expected to take steps to stimulate investment and consumption demand at a time when the economy is witnessing moderation from a solid growth last year. A reduction in personal income tax, if any, will result in increase in disposable incomes which in turn may boost demand for consumer goods.

Expectations are that the corporate income tax rate may be cut or the 10% surcharge on corporate tax may be abolished. The surcharge is 10% on a tax rate of 30%, making the effective corporate tax rate 33%. Another possibility is that of a cut in dividend distribution tax from 15% to 12.5%. Meanwhile, FM may raise the Securities Transaction Tax slightly.

It is also expected that the FM would announce some relief packages for troubled export sensitive sectors like textiles, rubber, jewelry, leather and IT services. These sectors have been hit by rupees surge in the past one year.

The BSE Mid-Cap index was up 1.64% at 7,817.13, while the BSE Small-Cap was up 1.58% at 9,800.88.

The market breadth was strong: on BSE 1,815 advanced as compared to 606 that declined. 68 stocks remained unchanged.

Power stocks rose. Power Grid Corporation of India surged 8.15% to Rs 110.90. Power Grid Corporation of India will replace Bajaj Auto in the S&P; CNX Nifty index from 14 March 2008, a statement from an NSE joint venture company said late on Tuesday, 26 February 2008. Tata Power Company (up 4.05% to Rs 1,411) and NTPC (up 1.96% to Rs 207.90) edged higher.

India's second largest power utility firm by revenue Reliance Energy extended rose 1.98% to Rs 1,730.10. The company said yesterday its board will meet on 5 March 2008 to consider, buy back of equity shares of the company.

Reliance Power rose 0.55% at Rs 450.75. The company had announced on Sunday 24 February 2008 that its board had approved a proposal for issuing free bonus shares to all categories of shareholders, excluding the promoter group (comprising of Reliance Energy and the ADA Group), in the ratio of 3 shares for every 5 shares held.

Capital goods stocks were in demand. Larsen & Toubro (up 4.37% to Rs 3,672), Bharat Heavy Electricals (up 4.19% to Rs 2,272) and Suzlon Energy (up 1.51% to Rs 319.85) edged higher.

Metal stocks edged higher. National Alluminium Company (up 3.7% to Rs 481), Jindal Stainless (up 3.21% to Rs 165.50) , Tata Steel (up 2.56% to Rs 829.80), Steel Authority of India (up 2.28% to Rs 250.85), Hindalco Industries (up 3.04% to Rs 203.20) and Sterlite Industries (up 1.72% to Rs 862.10) edged higher.

Indias largest private sector firm by market capitalization and oil refiner Reliance Industries rose 1.56% at Rs 2,616.05. The company said on Tuesday, 26 January 2008 it had discovered more gas in an exploration block off India's east coast. This is the company's eight discovery in the block.

Among the other sensex gainers, Housing Development Finance Corporation (HDFC) (up 3.91% to Rs 2,675), and ICICI Bank (up 2.54% to Rs 1,146.50), moved higher.

Among the Sensex losers, Infosys (down 1.45% to Rs 1,638), Bajaj Auto (down 1.05% to Rs 2,184.90) and Grasim Industries (down 0.42% to Rs 3,029.95) edged lower.

Indias largest truckmaker by sales Tata Motors rose 1.49% to Rs 712.55. Tata Motors and Ford reportedly plan to sign a memorandum of understanding possibly on 5 March 2008 for Tata Motors' possible acquisition of Ford's luxury British brands, Jaguar and Land Rover. The complete sale of Jaguar-Land Rover to Tatas will take 6-8 weeks.

As per reports, in a major development, the Ministry of Communications & IT has cleared applications of nine telecom aspirants and is close to issuing them Letters of Intent (LoIs). This will be followed by issuance of universal access service (UAS) licences and allocation of spectrum. However, the allocation of spectrum would take some time as the Department of Telecommunications (DoT) was finalising the amount of vacant spectrum. Apart from Datacom Solutions, Aska Projects, Spice Communications, Swan Telecom, Loop Telecom (a subsidiary of BPL Mobile), Unitech Builders & Estates, Nahan Properties, S Tel and Shyam Telelink are in the fray for start-up spectrum. Unitech (up 2.2% to Rs 399.05), Spice Communications (up 6.88% to Rs 34.95) and BPL (up 5% to Rs 66.50) edged higher.

Allcargo Global Logistics rose 1.1% to Rs 810 and Container Corporation of India rose 1.57% to Rs 1,747.Allcargo Global Logistics and Container Corporation of India have formed a joint venture to set up a depot in the northern state of Uttar Pradesh. The venture is expected to commence operations by January 2009.

IDBI rose 3.08% to Rs 120.35. IDBI reportedly plans to raise funds through mix of a rights and follow-on public offer in the next financial year.

Ispat Industries rose 3.26% to Rs 44.35. The board of Ispat Industries at a meeting held on 26 February 2008 approved issuing preferential warrants to promoters.

Jindal Saw rose 2.6% to Rs 912.05. The board of Jindal Saw at a meeting held on 26 February 2008 approved issuing 26 lakh warrants to Anbeeco Investments, Cyprus, a group company, on preferential basis. Further, the board also approved to allot 27.3 lakh, 9.5% unsecured compulsorily convertible debentures (CCDs). Each CCD is convertible into one equity share of Rs 10 each at a price not less than Rs 819 per share.

Bodal Chemicals hit 5% upper circuit at Rs 97.45 after its board approved rights issue of Rs 10.4 crore at Rs 20 per share.

In Asia, the key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore and Taiwan were up by between 0.8% to 3.72%.

US stocks rose for a third day on Tuesday as technology companies gained on IBM's plans to buy back $15 billion of its shares and the energy sector advanced on a record high close for oil in New York. The Dow Jones industrial average was up 114.70 points, or 0.91%, at 12,684.92. The Standard & Poor's 500 Index was up 9.49 points, or 0.69%, at 1,381.29. The Nasdaq Composite Index was up 17.51 points, or 0.75%, at 2,344.99.

On the New York Mercantile Exchange, April 2008 crude settled at a record $100.88 a barrel, up $1.65, on Tuesday.

On Tuesday, 26 Februray 2008, the market extended Monday (25 February 2008)'s gains after Railway Minister Lalu Prasad Yadav provided thrust on modernising rail infrastructure in Railway Budget 2008-09 which he presented to parliament on that day. The 30-share BSE Sensex rose 155.62 points or 0.88% at 17,806.19. Keeping the common man in mind, the railway minister also cut passenger fares, with parliamentary elections due in 2009. Firm