New Delhi: Markets flip-flopped in morning trade on Wednesday, with gains in lenders offset by losses in automakers and Reliance Industries, while investor sentiment remained largely driven by global cues.
Asian stocks edged up and the euro clawed back lost ground as investors waited for the end later on Wednesday of a Federal Reserve policy meeting expected to announce further steps to stimulate the flagging US economic recovery.
At 11:39am, the 30-share BSE benchmark index was up 0.05% at 17,108.22 points, with half of its components gaining.
“There is some profit booking after yesterday’s rally,” said D.D. Sharma, vice-president at brokerage Anand Rathi, adding, the euro zone’s sovereign debt crisis and a weakening U.S. recovery continue to weigh.
Greece’s pledge on Tuesday to bring forward painful austerity measures, to convince international lenders to return to Athens early next week for talks that it hopes will secure the aid it needs to avert bankruptcy, offered some relief.
Lenders, which have been battered in the past two months with the BSE banking index plunging nearly 12%, rose on value buying, with top state-run lender State Bank of India , ICICI Bank and HDFC Bank trading up between 0.6% and 1.4%.
“There is a feeling that the RBI (Reserve Bank of India) may pause rates,” said Deven Choksey, chief executive at brokerage K.R. Choksey.
India’s central bank raised key lending rate for the 12th time in 18 months last Friday and reiterated its vow to fight near double-digit inflation even as growth slows in Asia’s third-largest economy.
Automakers were down after a newspaper report that car makers have slashed output in the festive season for the first time in a decade as higher interest rates and rising fuel cost hurt demand.
Top car maker Maruti Suzuki and Tata Motors , were down 1.7% and 1.05%, respectively.
Index heavyweight Reliance Industries was down 1.46% to 839.50 rupees, after gaining 3.68% in the previous session.
The broader 50-share NSE index was up 0.02% at 5,141.30 points.
The MSCI’s measure of Asian markets other than Japan was up 0.27%, while Japan’s Nikkei was up 0.23%.
Pantaloon Retail rose as much as 4.3% after a newspaper reported that the Future Group, which owns the retailer, was in talks with Japan’s convenience store chain Lawson Inc to sell a 49% stake in its food sourcing and manufacturing operations.
Sterlite Technologies rose as much as 5% after the optical fibre cables and power transmission tower maker received a Rs 114 crore contract from state telecoms firm BSNL.
GVK Power & Infrastructure rose as much as 3.5% after 40.95 million shares changed hands in a block deal at Rs 17.45 a share on National Stock Exchange.