Markets gave up most of the opening gains in the morning session due to weakness in realty shares and reports from Indian Meteorological Department that monsoon may remain below forecast.
The Nifty advanced 30 points, 5,303 and the benchmark Sensex added 92 points, 17,643.
Asian markets advanced in the morning session after the Greek government won a confidence vote which would allow Greece to receive additional financial support boosting investor sentiment. The Japan's Nikkei Stock Average surged 1.3%, Hong Kong's Hange Seng added 0.7% and China's Shanghai Composite was flat, down 0.02%.
Also all eyes are on the Federal Reserve Open Market Committee meeting outcome. Market participants do not expect the US government to expand its balance sheet given the pickup in Inflation. However, the Federal Reserve may keep the monetary policy accommodative due to weakness in the economy. Markets across the world will take cues from Ben Bernanke’s statements out later today.
Markets may trade in a range going forward with downside bias as below forecast monsoon may firm up Inflation causing RBI to continue its tightening process. Weather Department said that rainfall may be 95% of long-period average. Ashish Chaturmohta from IIFL Wealth said "maximum open interest concentration was seen at 5200 and 5500 strike prices for put and call options respectively, suggesting range bound trade going forward."
On the technical charts Nifty holds crucial support at 5180 levels, which if breached could lead to further downside to 5000 or lower levels whereas on the upside immediate resistance was seen at 5320 level, a close above this may lead to marginal short covering towards 5380-5400 levels said Chaturmohta.
Among the sectoral indices, BSE Consumer Durables were the top gainers, up 0.4%. Rajesh Exports gained 3.9%, VIP Industries rallied 1.7% and Whirlpool was up 1.1%.
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PSU shares were laggards in trade; the index was down 0.1%. BEML declined 1.8%, Coal India was off 1.4% and State Bank of India dipped 0.8%.
Among individual stocks Sun Pharma was up 1.6% one of its units received approval from the US Food and Drug Administration to market a generic version of sumatriptan injection that is used in the treatment of migraine.
Top gainers on Sensex were Mahindra & Mahindra, up 1.3%, Infosys advanced 1% and Tata Power rallied 0.8%. Among the losers were Jindal Steel, down 2.3%, Reliance Infra lost 1.3% and Hindustan Unilever was off 1.3%.
The midcap and the smallcap indices were up 0.3% each.
Market breadth was positive, 886 stocks advanced for 636 stocks which declined.