Market pares gains; Nifty slips below 6,600

Markets turned flat in noon deals erasing initial gains as investors turned cautious ahead of the March series f&O expiry on Thursday. Key stock indices touched record high levels in opening deals tracking firm global cues and strong currency amidst robust foreign fund inflows.

At 1440hrs, the Sensex up 7 points at 22,062 levels and the Nifty was up 5 points at 6,594.

Markets may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near-month March 2014 series to April 2014 series. The near-month March 2014 F&O contracts expire tomorrow, 27 March 2014.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1223.28 crore on Monday, as per provisional data from the stock exchanges.

Adds Ranak Merchant, Technical Analyst - Strategies at Sushil Financial Services, “Nifty crossed above an important resistance zone of 6570 on Monday and has managed to close above the same for two continuous sessions. A psychological barrier of 6600 too has been surpassed and the next level eyed after expiry would be 6690 on Nifty spot.”

On the global front, Asian shares raced to two-week highs on Wednesday, with investor confidence getting a much-needed boost from upbeat US data and diminishing concerns over the Ukraine/Crimea crisis.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.1% to its highest level since March 11, while Japan's Nikkei ticked up 0.3%.

The rupee strengthened to its highest level in eight months on Wednesday morning, helped by hopes of continued foreign fund inflows while gains in other Asian currencies also underpinned sentiment.

On the sectoral front, BSE Metal index has surged by nearly 3% followed by counters like Oil & Gas, Capital Goods, Realty, Auto, Power and Banks, all gaining between 1-2%. However, BSE FMCG, Healthcare and IT indices have declined between 0.2-1%.

Hindalco and Sesa Strelite up 3-45 were the top gainers among Sensex-30.

Tata Motors, ONGC, Coal India, Tata Steel, Maruti Suzuki, Gail India, Axis Bank and RIL up 1.8-2.3% were the other prominent gainers.

Defensive names were the only losers in early noon trades. Dr Reddys Lab, Cipla and Sun Pharma slipped 0.6-2%.

Both the FMCG heavyweights were in red. ITC and HUL gave off 1.8% and 0.4%

Hero MotoCorp, TCS and HDFC Bank down 0.6-1.5% rounded off the losers list.

ITC has dipped 2% to Rs 355 on the BSE, with the stock falling on profit booking after recent upmove.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up by nearly 1% each.

The market breadth in BSE remains firm with 1,302 shares advancing and 1,232 shares declining.