Indian shares pared early morning gains on back of selling pressure witnessed in country's biggest FMCG company, Hindustan Unilever on concerns over higher royalty payments to the parent firm.
However hopes of new stimulus steps from US Federal Reserve coupled with Indian government efforts to pass key banking bill prevented a steep decline in stocks.
At 10 AM, the Bombay Stock Exchange's Sensex index was up 10 points and traded at 19,370 while the National Stock Exchnage's Nifty-50 index gained 8 points at 5,896.
Global risk appetite was mixed after Fed Chairman Ben Bernanke reiterated that monetary policy won't be enough to offset damage from the "fiscal cliff."
Asian shares traded mixed on Thursday with Shanghai Composite falling 0.7% to 2,068,Hang Seng up 0.03% to 22,511 and Straits Times gained 0.23% to 3,149 while Nikkei rose 1.6% to 9,734.
The MSCI Asia Pacific index outside Japan rose 0.5% to 900.95 in morning trades.
Back home, auto, technology, real-estate and metal indexes rose while fast moving consumer goods sector led decline on BSE.
Among key Sensex stocks, Hindustan Unilever and ITC declined 2%, Sun Pharma and Cipla fell 0.2-0.4%. Among the gainers, Tata Motors, Hero MotoCorp gained 3% and 1% each while Wipro rose 1%. In banking space, ICICI and State Bank of India rose nearly 1% each.
Hindustan Unilever (HUL) is trading lower by over 2% at Rs 519, extending its previous day’s 2.6% fall on reports that Unilever’s Indonesian subsidiary has agreed to pay a higher royalty payment to Unilever Plc.
Among other notable movers, NMDC is trading higher by 3% at Rs 159 after the government's offer Wednesday to sell a 10% stake in iron-ore miner has received strong response.
L&T Finance Holdings touched new high gaining 1%, while Reliance Capital gains 1.4% on hopes of clearance to the banking bill which would set the groundwork for companies to eventually gain banking licenses.
The BSE mid-cap and small-cap indices rose by nearly 0.4%.
The overall breadth is strong as 1,083 stocks have advanced while 626 stocks declined on the BSE.